Gold prices are solidly higher in early U.S. trading Monday, as the marketplace is jittery following a surprise ratings agency downgrade to U.S. government debt and lingering global trade worries. Silver prices are moderately up. June gold was last up $60.20 at $3,247.40. July silver prices were last up $0.421 at $32.775.
Risk aversion is elevated to start the trading week. Moody’s ratings agency downgraded the United States’ long-term credit rating from “Aaa” to “Aa1” last Friday, citing sustained increases in federal debt and chronic fiscal deficits. The U.S. now joins Fitch and S&P Global in no longer holding a perfect rating among major credit agencies.
Financial markets were also rattled a bit when U.S. Treasury Secretary Bessent said in an interview Sunday that trade tariffs would go back to April 2 announced levels if countries don’t negotiate with the U.S. “in good faith.” Fresh economic data out of China shows the trade war with the U.S. has dented the Chinese economy.
Asian and European stock markets were mixed to weaker in overnight trading. U.S. stock indexes are pointed to solidly lower openings today in New York.
Gold prices are sharply up on safe-have demand amid the sell off in global stock markets.
The key outside markets today see the U.S. dollar index sharply lower. Nymex crude oil futures prices are lower and trading around $62.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.546%.
U.S. economic data due for release Monday is light and includes leading economic indicators.
Technically, June gold futures bulls and bears are on a level overall near-term technical playing field but the bulls are fading. Bulls’ next upside price objective is to produce a close above solid resistance at $3,350.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the May low of $3,123.30. First resistance is seen at $3,275.00 and then at $3,300.00. First support is seen at the overnight low of $3,209.10 and then at $3,200.00. Wyckoff’s Market Rating: 5.0.
July silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $33.48. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at $33.00 and then at $33.48. Next support is seen at the overnight low of $32.425 and then at $32.00.
Source: Jim Wyckoff Kitco
