(Kitco News) - Gold prices are solidly higher in midday U.S. trading Tuesday, as world stock indexes took a pause from recent rallies. A slumping U.S. dollar on the foreign exchange market is also aiding the gold bulls, who are putting in a good showing so far this week. August gold futures were last up $15.90 an ounce at $1,720.70. July Comex silver prices were last down $0.068 at $17.825 an ounce.
U.S. stock indexes are mixed but mostly down at midday, on normal corrective pullbacks from recent strong gains. The Nasdaq index Monday hit a record high, while the S&P 500 stock index hit a three-month high. Trader and investor risk sentiment remains upbeat. Today’s NFIB small business optimism index rose to 94.4 in May from 90.9 in April. The U.S. government reported the American economy officially entered recession in February, while also on Monday the Federal Reserve expanded its lending program to U.S. businesses.
In other news, the Euro zone economy in the first quarter contracted by 3.6% from the fourth quarter of last year. Forecasters expect the second-quarter GDP reading to be worse.
The World Bank has forecast global GDP to see a 5.2% contraction this year. Advanced economies will contract 7%, led by a 9.1% decline in the Euro zone. Other GDP projections see the U.S. at -6.1%, China at up 1.0% and India -3.2%. “This is the first recession since 1870 triggered solely by a pandemic, and it continues to manifest itself… Given this uncertainty, further downgrades to the outlook are very likely,” the World Bank said. Global economic growth is due for a rebound in 2021, growing 4.2%, said the World Bank.
Today begins the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) that ends Wednesday afternoon with a statement and press conference from Fed Chairman Jay Powell. No change in interest rates is expected at this meeting. However, the Fed’s take on the health of the U.S. economy and its recovery pace will likely be markets-sensitive.
The important outside markets see the U.S. dollar index lower and hitting a three-month low today. Meantime, Nymex crude oil prices are slightly lower on a corrective pullback after hitting a three-month high Monday, and are trading around $38.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.82% level.
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, the bulls are out of the gate strong early this week and have the firm overall near-term technical advantage. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at $1,750.00. Bears' next near-term downside price objective is pushing prices below solid technical support at last week’s low of $1,671.70. First resistance is seen at today’s high of $1,729.40 and then at $1,740.00. First support is seen at $1,700.00 and then at $1,720.00. Wyckoff's Market Rating: 7.0
![Live 24 hours silver chart [ Kitco Inc. ]](https://www.kitco.com/images/live/silver.gif)
July silver futures bulls have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $19.075 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.15. First resistance is seen at $18.00 and then at $18.25. Next support is seen at this week’s low of $17.495 and then at last week’s low of $17.375. Wyckoff's Market Rating: 7.0.
July N.Y. copper closed up 315 points at 259.70 cents today. Prices closed nearer the session high today and hit another three-month high. The copper bulls have the firm overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 235.00 cents. First resistance is seen at today’s high of 260.25 cents and then at 262.50 cents. First support is seen at this week’s low of 253.05 cents and then at 250.00 cents. Wyckoff's Market Rating: 6.5.
