(Kitco News) – Gold and silver prices are moderately up in early-morning U.S. trading Tuesday, supported by some short covering in the futures market that has been prompted by a drop in the U.S. dollar index early this week. June gold futures were last up $5.70 an ounce at $1,287.20. July Comex silver was last up $0.106 at $14.95 an ounce.
Asian and European stock indexes were mixed in more subdued trading overnight. U.S. stock indexes are pointed toward steady to slightly lower openings when the New York day session begins. The U.S. stock indexes are near record or multi-month highs amid solid near-term price uptrends being in place.
In overnight news, the Euro zone reported its gross domestic product growth for the first quarter at 1.5%, year-on-year, which is better than the 0.9% growth rate seen in the fourth quarter and better than forecast. The Euro zone also reported its jobless rate at the lowest level in over 10 years.
In other news, both the official and Caixin/Markit purchasing managers indexes (PMIs) for China dropped in April from March, though still above the 50-point expansion level for a second straight month. The Caixin/Markit factory Purchasing Managers’ Index for April was 50.2 — lower than the March reading of 50.8, and below the 51 reading expected by analysts in a Reuters poll. The official China PMI dropped to 50.1 in April from 50.5 in March.
The U.S. economic data pace picks up starting today, including the Federal Open Market Committee (FOMC) meeting that begins this morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. No change in U.S. monetary policy is expected at this meeting.
U.S.-China trade talks resume today, with U.S. officials in Beijing. U.S. Treasury Secretary Mnuchin said in an interview late Monday that the talks are near conclusion and could wrap up next week. He added there remains some work to do on the matter, however. Most of the marketplace is fairly optimistic the U.S. and China will reach a trade deal in the coming weeks.
The key “outside markets” today see the U.S. dollar index down on profit taking after hitting a two-year high last Friday. Meantime, Nymex crude oil prices are higher and trading around $64.00 a barrel.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the employment cost index, the S&P-Cash-Shiller home price index, the ISM Chicago business survey, the consumer confidence index, and pending home sales.
Technically, the gold bears still have the overall near-term technical advantage. A nine-week-old downtrend line is in still place on the daily bar chart. However, last Friday’s bullish weekly high close is one clue that a market bottom is now in place. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at last week’s high of $1,290.90 and then at $1,300.00. First support is seen at $1,280.00 and then at $1,275.00. Wyckoff’s Market Rating: 4.0
July silver futures bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. However, last Friday’s bullish weekly high close is one clue that a market bottom is now in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the April high of $15.40 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at last week’s high of $15.12 and then at $15.25. Next support is seen at this week’s low of $14.905 and then at last week’s low of $14.775. Wyckoff’s Market Rating: 4.0.
By Jim Wyckoff
For Kitco News