· Gold and silver prices are near steady in early-afternoon U.S. trading Tuesday. Gold prices hit a three-week low overnight, while silver fell to a three-month low. A higher U.S. dollar index that is closing in on its for-the-move high scored in March continues to limit buying interest in the precious metals markets. June gold futures were last up $1.20 an ounce at $1,295.70. May Comex silver was last down $0.054 at $15.05 an ounce.
· Asian and European stock indexes were mixed to slightly up in quieter trading overnight, following Monday’s good gains. U.S. stock indexes are mixed at midday. The U.S. indexes are at or near their recent multi-month highs and are enjoying solid price uptrends on the charts. That’s also bearish for the competing asset class, safe-haven metals.
· Australia’s central bank, the Royal Bank of Australia, on Tuesday left its monetary policy unchanged at the bank’s regular meeting. The RBA did warn that the Aussie economy is not meeting its inflation target and doing so may take a while. This continues a theme of very low, and possibly even problematic, inflation in the major economies of the world. Low inflation is the enemy of raw commodity market bulls.
· Technically, June gold futures prices closed near mid-range today. The bulls still have the overall near-term technical advantage but have faded badly recently and need to show fresh power soon to avoid more serious chart damage being inflicted. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,330.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,287.50. First resistance is seen at $1,300.00 and then at $1,305.00. First support is seen at today’s low of $1,289.50 and then at $1,287.50. Wyckoff's Market Rating: 6.0
· Slowing momentum in the U.S. manufacturing sector is not helping to relieve any pressure in the gold market with prices relatively unchanged on the day.
· Tuesday the U.S. Census Bureau said that new durable goods orders dropped by $4.2 billion or 1.6% to $250.3 billion, in February, down from January’s rise of 0.1%. The data missed expectations as consensus forecasts called for a drop of 1.1%.
Meanwhile core durable goods, which strips out the volatile transportation sector was also weaker than expected, increasing 0.1% in February. Consensus forecasts were calling for a 0.3% increase.
· Gold Q2 Forecast: Bets for Fed Rate-Cut Fosters Bullish Outlook
The adjustments in the Fed’s Summary of Economic Projections (SEP) suggest the central bank will continue to change its tune over the coming months as officials trim the growth and inflation forecast for 2019 and 2020. In turn, Chairman Jerome Powell and co. are now projecting a longer-run interest rate of 2.50% to 2.75%, and the change in the forwardguidance indicates that the central bank is on course to conclude the hiking-cycle ahead of schedule as ‘data arriving since September suggest that growth is slowing somewhat more than expected.’
In turn, the current environment may continue to heighten the appeal of gold amid the upcoming changes in Fed policy. The price for bullion may exhibit a more bullish behavior over the coming months as the FOMC abandons hawkish forward guidance for monetary policy.
Reference: Kitco, DailyFX
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