(Kitco News) - Gold prices shot solidly higher and to the daily high in midday trading Tuesday, in the immediate aftermath of the release of prepared remarks from Federal Reserve Chair Janet Yellen's speech to the Economic Club of New York. The marketplace is deeming Yellen's comments as fully dovish on U.S. monetary policy. Respected CNBC economist Larry Kudlow termed Yellen’s comments as “very dovish.” June Comex gold was last up $17.20 an ounce at $1,239.00. May silver was last up $0.08 at $15.27.
The U.S. dollar index weakened significantly in the wake of Yellen's comments, which is also a bullish development for the precious metals markets. In her speech in New York, Yellen said the U.S. economic growth pace has weakened a bit and the pace of interest rate increases by the Fed will be only gradual. She said global developments and slow world economic growth also pose ongoing risks for the U.S. economy. Yellen also said the FOMC is not on a preset course of monetary policy tightening. Just recently, many market watchers were thinking the Fed might raise interest rates as soon as next month. However, Yellen’s remarks Tuesday threw cold water on that notion.
Gold prices were modestly weaker in overnight trading and then moved to modestly higher levels before Yellen’s comments hit the newswires and gave the yellow metal a big boost. Short covering and bargain hunting were featured in the gold market Tuesday, following the recent selling pressure that took prices to a five-week low on Monday.
Asian stock markets were mixed overnight, while European stock markets were firmer. U.S. stock indexes were higher in afternoon dealings Tuesday and also rallied on Yellen’s comments.
The next focus for traders and investors will be Friday’s U.S. jobs report, which is arguably the most important economic report of the month.
Technically, June gold futures prices closed nearer the session high. Prices Monday hit five-week low. Gold bulls have the overall near-term technical advantage and regained some upside momentum today. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,264.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at today’s high of $1,242.00 and then at $1,250.00. First support is seen at $1,226.00 and then at today’s low of $1,217.00. Wyckoff’s Market Rating: 6.5
May silver futures prices closed nearer the session high today after hitting a three-week low early on. The silver market bulls and bears are on an overall level near-term technical playing field. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $16.17 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at this week’s high of $15.375 and then at $15.50. Next support is seen at today’s low of $15.06 and then at $15.00. Wyckoff's Market Rating: 5.0.
May N.Y. copper closed down 375 points at 220.85 cents today. Prices closed nearer the session low today and hit a nearly four-week low. The copper bulls and bears are now back on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the March high of 232.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the 215.00 cents. First resistance is seen at this week’s high of 225.55 cents and then at 228.00 cents. First support is seen at today’s low of 219.70 cents and then at 217.00 cents. Wyckoff's Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
