Gold prices are higher and scored a nearly three-month high in early U.S. trading Tuesday. More safe-haven demand and technical buying are featured and bulls have near-term momentum on their side. February Comex gold was last up $7.60 at $1,112.90 an ounce. March Comex silver was last up $0.081 at $14.335 an ounce.
World stock markets are mostly lower Tuesday, led by another rout in Chinese stock indexes. The Shanghai stock index fell over 6% on Tuesday and is now down 22% so far this year. Worries about the plunging value of the Chinese yuan and capital leaving the country are helping to fuel panic selling of equities in China, which in turn is leading to solid selling pressure in Asian equities markets and also spilling over into European and U.S. stock markets. The shaky stock markets play right into the hands of the safe-haven gold market bulls.
The key “outside markets” on Tuesday morning find Nymex crude oil futures prices firmer following solid losses on Monday. Crude oil bears remain in firm technical control and gained fresh downside momentum Monday. There are now no early clues of a market bottom in oil being close at hand. Meantime, the U.S. dollar index is trading slightly higher in early U.S. dealings.
The Federal Open Market Committee (FOMC) meeting begins Tuesday and ends Wednesday afternoon with a statement. While no change in U.S. interest rates is expected at this meeting, the statement issued after the meeting will be very closely scrutinized. Many market watchers agree the world economies and financial markets have become shakier since the last FOMC meeting in mid-December.
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