Gold and Silver Prices Rise Sharply in Early U.S. Trading

Gold and silver prices are higher, with silver showing significant gains in early U.S. trading Tuesday. Positive daily outside-market forces are supporting the bulls at the start of the U.S. trading week. The U.S. dollar index is lower, and crude oil prices are higher. June gold increased by $14.30 to $2,348.80, while July silver rose by $1.296 to $31.795.

Silver's strong gains are attributed to reports of increased Chinese demand for silver. Highlighting the rising global demand for metals, broker SP Angel reported that a University of Michigan study indicated the amount of copper needed for electric vehicles is "impossible for mining companies to produce." The study emphasized the critical challenge of insufficient copper production for the global transition to EVs, noting that EVs require three to five times more copper than traditional vehicles. The study analyzed 120 years of global copper production data and modeled future production against projected copper needs for renewable energy and EVs, concluding that renewable energy's copper requirements exceed current production capacity.

Asian and European stock indexes were mixed overnight. U.S. stock indexes are expected to open mixed to firmer as the New York session begins. The U.S. markets are off to a quieter start following the Memorial Day holiday closure on Monday. However, the week is packed with significant U.S. economic data releases, including Friday's personal income and outlays report with the closely watched PCE inflation indexes.

Key outside markets today show the U.S. dollar index lower. Nymex crude oil prices are higher, trading around $79.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is 4.45%.

U.S. economic data set for release Tuesday includes the monthly house price index, the S&P CoreLogic house price indexes, the consumer confidence index, and the Texas manufacturing outlook survey.

Technically, June gold futures bulls maintain a near-term technical advantage but have recently faded. A bearish double-top reversal pattern suggests a near-term market top is in place. Bulls aim to close above solid resistance at the record high of $2,454.20, while bears target pushing prices below solid support at the May low of $2,285.20. Initial resistance is seen at the overnight high of $2,360.00, followed by $2,375.00. Initial support is at the overnight low of $2,333.80, followed by last week's low of $2,326.30. Wyckoff's Market Rating: 6.0.

July silver futures bulls hold a strong near-term technical advantage and regained momentum today. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls aim to close above solid resistance at the May high of $32.75, while bears aim to close below solid support at $29.00. Initial resistance is at the overnight high of $32.095, followed by $32.50. Initial support is at $31.00, followed by today's low of $30.555. Wyckoff's Market Rating: 8.0.