Gold prices surged to a new record high in midday U.S. trading on Tuesday, with December Comex futures reaching $2,675.70 per ounce. Silver also experienced significant gains, hitting a nine-week high. Both precious metals are benefitting from a strong safe-haven demand amid global uncertainties, coupled with bullish technical indicators drawing speculators to long positions. By midday, December gold futures were up $20.40 at $2,673.00, while December silver futures gained $1.20, climbing to $32.295 per ounce.
Adding to the positive momentum for precious metals, China’s central bank announced a major policy easing, cutting the reserve requirement ratio for banks by 0.5%. This marks the largest easing move by China since the onset of the pandemic and aims to bolster the country’s struggling stock and property markets. The move is expected to spur increased demand for raw commodities, including metals, from the world’s second-largest economy. Copper prices rallied sharply in response to the news. Additionally, the People’s Bank of China (PBOC) hinted at further rate cuts by year’s end, ranging from 20 to 50 basis points. It also lowered its seven-day reverse repo rate from 1.7% to 1.5%. PBOC Governor Pan noted that these measures would inject $142 billion into the banking system, with Barron’s highlighting the impact, calling the stimulus a “big deal.”
Meanwhile, geopolitical tensions in the Middle East are intensifying, as the conflict between Israel and Hezbollah escalates. This week’s Israeli airstrikes in Lebanon have been described as the most intense since 2006, further fueling safe-haven demand for gold and silver.
In other markets, the U.S. dollar index is weaker today, while Nymex crude oil prices are trading higher, currently around $71.25 per barrel. The yield on the benchmark 10-year U.S. Treasury note has dipped to approximately 3.76%.
From a technical standpoint, December gold bulls maintain a strong near-term advantage. Their next target is to close above solid resistance at $2,750.00, while bears are aiming to push prices below support at $2,500.00. Key resistance levels are first seen at the recent high of $2,675.70 and then at $2,685.00, with initial support at $2,650.00, followed by this week’s low of $2,638.60. Wyckoff’s Market Rating for gold stands at an impressive 9.5.
Silver bulls also hold a strong technical edge, with prices in a sustained six-week upward trend on the daily charts. The next upside objective for silver is breaking through resistance at $33.50, while bears are aiming to close below support at $30.00. Immediate resistance for silver is noted at the July high of $32.46 and then at $33.00, with initial support seen at $32.00 and then at $31.50. Wyckoff’s Market Rating for silver is 7.5.
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