Gold and silver prices surged in early U.S. trading on Wednesday following dovish comments from Federal Reserve Chairman Jerome Powell and amidst a flurry of U.S. economic data. As of the latest update, August gold rose by $25.90 to $2,359.30, while July silver increased by $1.232 to $30.585.
Market sentiment, including that of precious metals and U.S. stocks, was buoyed after Powell’s speech at a European Central Bank event on Tuesday, where he hinted at potential easing of U.S. monetary policy. According to Angus Campbell of Trade Nation, Powell’s remarks were seen as dovish, focusing on progress in inflation reduction while emphasizing the need for sustained evidence before considering policy loosening. Despite this cautious stance, the market anticipates a high likelihood of two 25-basis-point rate cuts by year-end, as reported by the Wall Street Journal today under the headline “Powell puts rate cuts back into view.”
Wednesday proved to be a busy day for U.S. economic data, with a range of reports including the MBA mortgage applications survey, ADP national employment report, and weekly jobless claims among others. Overnight, Asian and European stock indexes displayed mixed but generally stronger performances. However, U.S. stock futures pointed to weaker openings following record highs set by the S&P 500 and Nasdaq on Tuesday. Many markets closed early ahead of the U.S. Independence Day holiday, with all U.S. markets set to remain closed on Thursday.
In international news, the Euro zone reported a 0.2% month-on-month decline and a 4.2% year-on-year drop in the May producer price index, largely meeting market expectations. Meanwhile, attention shifts to the upcoming general elections in the UK on Thursday, deemed crucial by many analysts.
Key outside markets indicated a slight dip in the U.S. dollar index, while Nymex crude oil prices hovered around $82.75 per barrel. The 10-year U.S. Treasury note yield stood at 4.43% as of the latest data.
Technical analysis showed that August gold maintained a near-term advantage for bulls, with the next upside target set at closing above resistance levels near $2,406.70. Conversely, bears would aim to push prices below solid support at $2,300.00. For September silver futures, bulls regained momentum with an advantage in near-term technicals, targeting a close above resistance at $32.00, while bears would seek a close below support at $28.90.
Overall, market sentiment remains cautious yet optimistic amidst ongoing economic data releases and global developments affecting key asset classes.
