Solid gains for gold, silver as USDX dips, Crude rallies

(Kitco News, Tuesday May 28th, 2024) – Gold and silver prices are sharply higher in midday U.S. trading Tuesday, with silver knocking on the door of an 11-year high. Bullish daily outside-market forces are working in favor of the precious metals bulls to start the U.S. trading week. The U.S. dollar index is lower and crude oil prices are solidly higher. June gold was last up $25.90 at $2,360.40. July silver was last up $1.791 at $32.29.

Silver’s very strong gains today come amid reports of stronger Chinese demand for silver. To underscore the increased global demand for metals, respected broker SP Angel today reported in an email dispatch that a University of Michigan study said the amount of copper needed for electric vehicles is “impossible for mining companies to produce.” The study highlighted the critical challenge of insufficient copper production for the global transition to EVs, saying the amount of copper needed for EVs is “essentially impossible for mining companies to produce.” An EV requires three to five times more copper than traditional gas or diesel cars. The study analyzed 120 years of global copper production data and modeled future production against projected copper needs for renewable energy and EVs. The study concluded that renewable energy’s copper needs exceed current production capacity.

U.S. stock indexes are mixed to at midday. It’s a quieter start to the holiday-shortened week in the U.S. Markets were closed Monday for the Memorial Day holiday. However, it’s a busy week for U.S. economic data releases, highlighted by Friday’s personal income and outlays report that includes the closely watched PCE inflation indexes.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly higher and trading around $79.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.5%.

Technically, June gold futures bulls have the overall near-term technical advantage. However, a bearish double-top reversal pattern has formed on the daily bar chart to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,454.20. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the May low of $2,285.20. First resistance is seen at today’s high of $2,365.50 and then at $2,375.00. First support is seen at $2,350.00 and then at the overnight low of $2,333.80.

July silver futures bulls have the solid overall near-term technical advantage and regained power today. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the May high of $32.75. The next downside price objective for the bears is closing prices below solid support at $29.00. First resistance is seen at the overnight high of $32.45 and then at $32.75. Next support is seen at $32.00 and then at $31.50.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com