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(Kitco News) – Comex gold futures prices are up and overnight hit a new record high of $2,085.40 an ounce, on safe-haven demand amid a jittery U.S. banking system and worries about a U.S. and/or global economic recession. Silver prices are also higher. June gold was last up $13.80 at $2,050.90 and July silver was up $0.234 at $25.915.
Risk aversion is keener late this week following another interest rate increase from the Federal Reserve Wednesday afternoon. The 0.25% hike in the Fed Funds rate was widely expected but it was no help for the U.S. banking system, parts of which are shaky. Reports now say PacWest Bancorp, a California-based lender, is in trouble. Its stock price saw a 60% decline in after-hours trading Wednesday. The bank is reported to be considering strategic options including a sale. PacWest is much smaller in size compared to failed Silicon Valley Bank and First Republic Bank. Still, this news is keeping U.S. banking turmoil on the front burner of the marketplace and keeping traders and investors nervous. Reads a Barrons headline today: “Powell says banking system is “sound and resilient;” try telling that to PacWest investors.”
Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
The European Central Bank is meeting Thursday. The ECB is also expected to raise its main interest rate by a quarter-point.
The marketplace is now looking forward to Friday”s April U.S. jobs report from the Labor Department. The key non-farm payrolls number is forecast to come in at up 180,000 versus a rise of 236,000 in the March report. The U.S. ADP national employment report on Wednesday came in strong, showing 296,000 jobs were created in April, almost double the forecast.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices hit a 1.5-year low of $63.64 overnight but rebounded and are now trading around $68.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.367%. Treasury yields have dipped this week on flight-to-quality buying amid the wobbly U.S. banking stocks.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, preliminary productivity and costs, the global manufacturing PMI and the monthly chain store sales index.
Technically, the gold futures bulls have the strong overall near-term technical advantage. Bulls” next upside price objective is to produce a close in June futures above solid resistance at $2,100.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at $2,063.40 and then at the overnight record high of $2,085.40. First support is seen at the overnight low of $2,038.50 and then at Tuesday”s low of $2,016.00. Wyckoff’s Market Rating: 9.0
The silver bulls have the solid overall near-term technical advantage. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at the April high of $26.435. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at this week”s high of $25.765 and then at $26.00. Next support is seen at the overnight low of $25.70 and then at Wednesday”s low of $25.355. Wyckoff’s Market Rating: 8.0.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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