(Kitco News) – Gold and silver prices are firmly higher in early U.S. trading Thursday, lifted in part by the U.S. dollar index that is selling off again today. Chart-based buying is also featured in both metals as their technical postures have markedly improved this week. Ideas of more accommodative global monetary policies amid slowing world economic growth remain supportive elements for the safe-haven metals. August gold futures were last up $8.50 an ounce at $1,342.10. July Comex silver prices were last up $0.184 at $14.975 an ounce.
European stock indexes were mostly firmer overnight, while Asian shares were mostly weaker. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The U.S. indexes are posting solid gains this week after hitting three-month lows on Monday.
The European Central Banks left interest rates unchanged at its regular monetary policy meeting that just concluded. The ECB did extend the length of time that bank officials expect rates to remain at current levels. The interest rate on the main refinancing operations and the rates on the marginal lending facility and deposit facility will remain at 0.00%, 0.25% and minus 0.40%, respectively. As usual, traders are closely monitoring ECB President Mario Draghi’s remarks at his press conference.
There are hopes in the marketplace that the U.S. trade tariff threats against Mexico, set to go into effect soon, can be withdrawn as Mexican and U.S. officials are presently meeting to discuss more Mexican participation in curbing illegal immigrants from crossing the Mexican border into the U.S. Also, some Republican members of Congress are pushing back on President Trump’s use of trade tariffs to achieve his non-trade goals.
World government bond markets continue to see their yields drop amid very low inflation and worries about slowing global economic growth and the resulting easier monetary policies from the major central banks. The German 10-year bond yield dropped to minus 0.232% today.
In overnight news, the Euro zone reported its first-quarter GDP at up 0.4% from the fourth quarter and up 1.3%, year-on-year. Those numbers were right in line with market expectations but still very tepid.
The key “outside markets” today see the U.S. dollar index trading lower in early U.S. action. The greenback bulls have faded recently and the near-term price uptrend for the USDX has been negated to suggest a market top is in place. Meantime, Nymex crude oil prices are firmer and trading around $52.00 a barrel after dropping to a nearly five-month low on Wednesday.
Traders are awaiting Friday morning’s employment situation report for May from the Labor Department—arguably the most important U.S. data point of the month. The non-farm jobs component of that report is forecast at up 180,000. Wednesday’s ADP national employment report for May showed only 27,000 jobs added in the month. That anemic number has many looking for a weaker number in Friday’s jobs report.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade report, revised productivity and costs, and the monthly chain store sales index.
Technically, the gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the February high of $1,361.50. Bears’ next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,325.00. First resistance is seen at this week’s high of $1,348.90 and then at $1,361.50. First support is seen at $1,335.70 and then at the overnight low of $1,331.30. Wyckoff’s Market Rating: 7.0
July silver futures bears still have the slight overall near-term technical advantage. However, in a three-month-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $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 this week’s high of $15.04 and then at $15.12. Next support is seen at the overnight low of $14.73 and then at this week’s low of $14.565. Wyckoff’s Market Rating: 4.5.
By Jim Wyckoff
For Kitco News