Gold, Silver Prices Stabilize After Beatdown

(Kitco News)- Gold and silver prices are steady to slightly up in early-afternoon U.S. tradingTuesday. Earlier in the session, both metals saw follow-through sellingpressure after strong losses posted Tuesday. Gold prices hit a five-month lowovernight. June Comex gold futures were last up $0.60 an ounce at $1,291.00.July Comex silver was last up $0.081 at $16.35 an ounce.

Thesurging U.S. dollar has been a major factor working against the precious metalsmarket bulls over the past few weeks. The U.S. dollar index hit anotherfive-month high overnight, but had backed off its daily highs as of middaytoday, which lent just a bit of support to the precious metals.

Thegold and silver bulls need a dose of geopolitical unrest to wrestle theirmetals away from the grip of the appreciating greenback. Their wish may begranted as it appears the U.S.-North Korea summit in June is unraveling, whichis not surprising to many. North Korea has cancelled talks with South Korea andnow says it will not completely disarm its nuclear arsenal. The U.S. has notformally responded. This development could flare up into a markets-movinggeopolitical event in the near term.

Attentionof the marketplace this week is also on U.S. trade meetings with China inWashington, D.C. Also, a possible U.S. decision on the NAFTA trade agreementwith Canada and Mexico could be announced late this week, but many are skepticalit will happen so soon.

Somethingelse to keep an eye on: The Turkish currency, the lira, fell to a record lowagainst the U.S. dollar overnight, which prompted the Turkish central bank toissue a warning about “unhealthy” developments in the markets. In years past,unstable secondary currency markets have produced a contagion effect in themajor currencies. This is not the case now, but it still warrants monitoring.Any tensions in the currency markets would likely prompt safe-haven demand forgold and silver.

Theother key “outside market” today finds Nymex crude oil prices weaker and near$71.00 a barrel, and not far below Tuesday’s 3.5-year high.