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Gold, silver prices rise as traders await Powell's second round of forecasts

2024-07-11

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Gold and silver prices saw a nice rise in early trading in the US on Wednesday (July 10) ahead of Federal Reserve Chairman Jerome Powell's second appearance before the US Congress this week. Spot gold rose $15.83 to $2,379.43 during the session. Spot silver rose $0.114 to $30.877.

Powell is tasked with reporting to a House panel on the nation's economic health today. Powell told a Senate committee on Tuesday that the US job market has "cooled quite a bit," further fueling speculation that the Fed will cut interest rates later this year. The market expects the Fed to cut rates for the first time in September. Overall, the market believes that Powell's remarks on Tuesday did not contain new hawkish views. It is doubtful whether Powell's speech today will be a surprise.

Meanwhile, US Treasury Secretary Yellen responded to Powell's statement on Tuesday.

Yellen said that the US labor market is no longer driving US inflation. Traders and investors are now waiting for the US Consumer Price Index for June to be released on Thursday and the Producer Price Index for June to be released on Friday.

Asian and European stock indices were mostly stronger overnight. U.S. stocks were steady or stronger at the open, with the S&P 500 and Nasdaq set to open at or near record highs. Overnight news showed that China's consumer price index (CPI) rose just 0.2% year-on-year in June, below expectations for a 0.4% gain. Food prices fell 2.1% over the same period.

The headline of a Dow Jones Newswires report today was: "Central banks are expected to continue to add to their gold reserves aggressively." The report said Citi analysts expect central banks to buy a record of about 1,100 tons of gold this year. This would be an increase of about 6% from last year.

The U.S. dollar index fell slightly in major external markets today. Crude oil prices were slightly weaker on the New York Mercantile Exchange, trading around $81.25 a barrel. The benchmark 10-year U.S. Treasury yield is currently at 4.282%.

U.S. economic reports due out Wednesday include the MBA mortgage applications survey, monthly wholesale trade and the weekly U.S. Department of Energy liquid energy inventory report.

From a technical perspective, spot gold bulls have a solid overall short-term technical advantage. Bulls' next upside price objective is closing prices above resistance at $2,406.70. Bears' next near-term downside price objective is pushing futures prices below technical support at $2,300.00. First resistance is seen at $2,400.00 and then at $2,406.70. First support is seen at the overnight low of $2,369.70 and then at this week's low of $2,356.00.

Spot silver futures bulls have a solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above technical resistance at $33.05. Bears' next downside price objective is closing prices below solid support at the June low of $28.90. First resistance is seen at last week's high of $31.79 and then at $32.00. Next support is seen at this week's low of $30.71 and then at $30.45.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Gold, silver prices rise as traders await Powell's second round of forecasts

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