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Gold prices gain as bulls ponder U.S. rates below zero | The Mesh Report

Gold prices gain as bulls ponder U.S. rates below zero

Mike Hammer May 13, 2020 Comments Off on Gold prices gain as bulls ponder U.S. rates below zero

Gold and silver prices are moderately up in early U.S. trading Wednesday. There continues some safe-haven buying in the precious metals amid still-keen uncertainty regarding how the Covid-19 pandemic will ultimately impact the global economy. A weaker U.S. dollar index today is also working in favor of the precious metals market bulls. June gold futures were last up $6.20 an ounce at $1,713.20. July Comex silver prices were last up $0.076 at $15.785 an ounce.

The marketplace will be closely watching Federal Reserve Chairman Jerome Powell in a morning webcast to an economics group, and especially wanting to hear this thoughts on U.S. interest rates that could fall into negative territory. President Trump tweeted Tuesday he would be in favor of such occurring. This matter is of special interest to precious metals traders, as the knock on investing in gold has been that it offers investors no dividend. Interest rates at or below zero would work to eliminate the “opportunity cost” associated with owning precious metals.

Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors at mid-week are staying mostly upbeat despite increasing concerns about a second wave of Covid-19 infections hitting the world’s major economies that are starting to open back up. The top U.S. health official on Tuesday warned the U.S. Congress about the dangers of reopening the economy too early. Also, the specter of a renewed U.S.-China trade war, or worse, looms in the background after recent harsh rhetoric coming from both sides and directed at the other.

In overnight news, Eurozone factory output in March dropped 11.3% from February, which was a monthly record. Also, U.K. GDP dropped 2.0% in the latest quarter.

The important outside markets see Nymex crude oil futures slightly lower early today and trading around $25.50 a barrel. The U.S. dollar index is lower today. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.66%.

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