Gold prices opened on Tuesday with a slight increase, due to safe-haven demand following a terrorist attack in Jordan that claimed the lives of three U.S. soldiers. This incident has heightened global tension and investors are nervously waiting for the U.S. military’s response. April gold was up $9.10 at $2,053.70, while March silver was down $0.011 at $23.24.
There is a sense of risk aversion in the markets following a Houthi drone strike against U.S. troops in Jordan, which has created uncertainty and caused Asian stock markets to trade mixed and European stock indexes to mostly trade up. The U.S. stock index futures are set to open slightly lower, indicating continued concerns about potential economic and geopolitical implications of this attack.
The U.S. economic data point of the week is the Open Market Committee meeting of the Federal Reserve that starts Tuesday morning. It is expected that the FOMC will not change U.S. monetary policy at this meeting but will provide new guidance on future policy plans, which will be closely monitored by market participants.
The key outside markets today see the U.S. dollar index a bit weaker, with Nymex crude oil prices near steady and trading around $77.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.062%. In addition to geopolitical tensions, investors will be keeping an eye on Tuesday’s U.S. economic data, which includes the weekly Johnson Redbook retail sales report, the monthly house price index, the S&P Core Logic Case-Shiller home indexes, and the job openings and labor turnover (JOLTS) survey.
Technically, the gold futures bulls have the slight overall near-term technical advantage but have faded, and silver bears have the overall near-term technical advantage. Prices of both metals are in downtrends on the daily bar chart. However, bulls’ and bears’ next upside and downside price objectives have been clearly outlined, which will help investors understand potential price movement.
In addition to the analysis provided, it will be interesting to observe how the geopolitical tensions between the U.S. and Iran, the FOMC meeting, and U.S. economic data releases will impact market sentiments and commodity prices in the coming days.
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