Gold, silver see price gains on bullish outside markets

Gold and silver prices are modestly higher in early morning U.S. trading Tuesday, with gold scoring a five-month high. Bullish outside markets to start the U.S. trading week are helping out the precious metals market bulls—a lower U.S. dollar index and higher crude oil prices. The technical postures for both metals remain fully bullish. August gold futures were last up $5.80 at $1,909.80 and July Comex silver was last up $0.431 at $28.45 an ounce.

Gold prices are also boosted as traders seek out the metal has a hedge against rising inflationary pressures. Reports said gold exchange traded funds (ETF’s) have seen more money flow into them the past few weeks.

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trader and investor risk appetite remains keener to start the month of June, amid notions the Federal Reserve may have been right in its proclamations that rising inflation will only be transitory.

Bloomberg reported hedge-fund managers have reduced their holdings in 20 out of 23 commodities, due in part to recent milder and wetter weather in the U.S. that is raising the prospects for larger harvests of grains. China’s government’s recent remarks on futures markets speculation, along with new regulations limiting the sale of futures to individual investors, have also taken some of the bullish fervor out of the raw commodity sector.