Gold and silver prices have dipped in early US trading Tuesday due to the impact of a firmer US dollar index. Rising US Treasury yields and a still-hawkish US Federal Reserve also contribute to the negative trend in the two precious metal markets. August gold was last down $8.40 at $1,962.80, and July silver was down $0.251 at $23.875.
Global Stock Market and US-China Relations
Global stock markets saw mixed performances overnight. US stock indexes are expected to open lower when the New York day session begins. The S&P 500 and Nasdaq stock index are not far below last week’s 10-month highs. In overnight news, China eased its monetary policy by lowering two key lending rates by 10 basis points; however, this was deemed less than expected by market analysts.
US Secretary of State Anthony Blinken met with Chinese President Xi Jinping on Monday to “stabilize” the deteriorated US-China ties, but without defined agreements on better military communications between the two countries.
Fed Chair Jerome Powell’s Testimony and Market Expectations
Fed Chair Jerome Powell will provide his semi-annual monetary policy report to Congress on Wednesday and Thursday. The marketplace will watch closely for any fresh clues as to when the rate increases will occur. Depending on the tone of the report, the US dollar and US Treasury yields could be affected significantly.
Technical Analysis and Price Outlook
Technically, gold futures bulls hold a slight overall near-term technical advantage, but bears have re-established a price downtrend on the daily bar chart. Silver bulls also have the overall near-term technical advantage. The performance of both metals will be impacted by market developments and the outcomes from upcoming Federal Reserve speeches.