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(Kitco News) – Gold and silver prices are sharply higher early in the morning of US trade on Thursday. Gold rose to a five-year high, while silver prices hit a five-week high. The main central banks that are leaning on their monetary policies are boosting metals and the commodity sector in general. Gold is also seeing an increase in the interest in buying safe havens, as tensions in the Persian Gulf are on the rise. August gold futures were the last $ 37.50 an ounce at 1,386.50. July Comex silver prices were the last $ 0.417 to $ 15.385 an ounce.
Traders and investors are still digesting Wednesday's findings from the Federal Open Market Committee (FOMC) meeting, which saw no change in US interest rates, but the Fed has tipped significantly more dovish. The FOMC statement said the committee would cut interest rates in the coming months if US economic growth began to slow. The FOMC expects the US economic expansion to continue, but "uncertainties about this prospect have increased," the statement said. About half of FOMC members now expect the Fed to make at least an interest rate cut this year. The FOMC statement also deleted the word "patient" from its monetary policy stance.
Markets continue to react to the Fed meeting and also to the easy stance of European Central Bank President Mario Draghi on monetary policy in comments he made earlier this week. The US dollar index was settled, the euro currency recovered, oil prices rose and US stock indexes rose higher and were within easy reach of their record highs. European and Asian stock indexes were also higher at night.
The Bank of England and the Bank of Japan also hold their regular monetary policy meetings later this week.
Gold is also seeing the demand for refuge today in reports that the Iranian military has shot down a US military drone in Iranian territory. In addition, a missile struck a Saudi Arabian water plant, and Iran is being blamed. Iran's stare in the US has just risen to another level. President Trump is now closer than ever to unleashing some degree of military operation against Iran. It is a good bet that this situation will deteriorate before it improves.
Major foreign markets today see Nymex's crude oil prices solidly higher and trading barely above $ 55 a barrel. Meanwhile, the US dollar index is lower in good follow-through sales of solid losses reported late Wednesday afternoon, following the FOMC's dovish statement.
US economic data to be released on Thursday includes the weekly report on unemployment benefit applications, the Philadelphia Fed business survey, key economic indicators and international transactions (checking account).
Technically, gold bulls have the solid short-term overall technical advantage and have gained more power today. Prices are on a seven-week high trend on the daily bar chart. The bulls' next bullish price target is to produce a close on August futures above solid resistance at $ 1,400.00. The next target of short-term price flight of the Bears is pushing August futures prices below solid technical support to $ 1,361.50. The first resistance is $ 1,390.00 and then today's high of $ 1,397.70. First support is seen at $ 1,375.00 and then at $ 1,370.00. Wyckoff Market Review: 8.5
Silver futures from July now have the short-term general technical advantage. Prices are on a three-week high trend on the daily bar chart. The next bullish price escape target for silver bulls is to close prices above solid technical resistance at $ 16.00 an ounce. The next target of negative price getaway for bears is to close prices below solid support at $ 14,625. The first resistance is seen at night high of $ 15.40 and then at $ 15.50. The next support is seen at $ 15.25 and then the overnight low of $ 15.12. Wyckoff Market Review: 6.0.
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