By Jim Wyckoff, Kitco Metals
(Kitco News) - Gold and silver prices are solidly higher in midday U.S. trading Tuesday, on a resumption of safe-haven demand amid rising worries about a U.S. economic recession amid a major sell off in the U.S. stock market. A lower U.S. dollar index that notched a four-month low overnight is also a friendly outside-market element for the two precious metals. April gold was last up $23.30 at $2,922.90. May silver prices were last up $0.70 at $33.23.
U.S. stock indexes are lower at midday and hit new for-the-move and multi-month lows as the U.S. said it is slapping more trade tariffs on Canada today. Reads a Wall Street Journal headline today: “Stock market plunges, recession worries spread.”
The key outside markets today see the U.S. dollar index solidly lower and hit a four-month low. Nymex crude oil futures prices are firmer and trading around $66.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.25%.
The U.S. data points of the week are the consumer price index report for February on Wednesday and the producer price index for February on Thursday. The CPI report is seen coming in at up 2.9%, year-on-year, versus a rise of 3.0 in the January report. The PPI report is seen up 0.3%, month-on-month compared to a rise of 0.4% in the January report.
Technically, April gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,974.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $2,844.10. First resistance is seen at today’s high of $2,929.00 and then at last week’s high of $2,941.30. First support is seen at $2,900.00 and then at today’s low of $2,882.50. Wyckoff's Market Rating: 7.5.
May silver futures bulls have the overall near-term technical advantage and prices today scored a bullish “outside day” up on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $34.56. The next downside price objective for the bears is closing prices below solid support at the February low of $31.365. First resistance is seen at today’s high of $33.40 and then at $34.00. Next support is seen at $33.00 and then at $32.50. Wyckoff's Market Rating: 6.0.
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