Gold Sinks To 6-Week Low; Risk Appetite Still Keen
(Kitco News) - Gold prices are solidly down and hit a six-week low in early U.S. trading Thursday. Rallying world stock markets and minimal risk aversion in the marketplace are keeping buyers of the safe-haven metal scarce. Silver continues to take a beating as prices hover near this week’s four-month low. June Comex gold was last down $13.70 an ounce at $1,234.70. July Comex silver was last down $0.056 at $16.485 an ounce.
Global equity markets were mostly firmer overnight, on upbeat corporate earnings reports. European shares were lifted on better Euro zone economic data released recently. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Up-trending world stock markets are keeping trader and investor interest away from precious metals markets.
Traders are awaiting Friday morning’s U.S. jobs report for April from the Labor Department. The key non-farm payrolls number is forecast to come in at up around 190,000.
The marketplace is also awaiting this weekend’s French presidential elections. A surprise win by the right-wing candidate Marine Le Pen would likely roil many stock and financial markets. However, centrist candidate Emmanuel Macron fared pretty well in a televised debate Wednesday evening, which assuaged European market watchers. Macron is heavily favored to win Sunday’s election.
The key outside markets on Thursday morning see the U.S. dollar index trading slightly lower. The greenback bears still have the slight overall near-term technical advantage. Meantime, Nymex crude oil prices are weaker and the bears have the near-term technical advantage as prices hit a 5.5-month low earlier this week.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, preliminary productivity and costs for the first quarter, the international trade report, manufacturers’ shipments and inventories, the global services PMI and monthly retail chain store sales.
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Technically, June gold futures bears have gained the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,272.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at the overnight high of $1,241.70 and then at $1,250.00. First support is seen at $1,230.00 and then at $1,225.00. Wyckoff’s Market Rating: 4.0
July silver bears have the firm overall near-term technical advantage as prices hit a four-month low Wednesday. The next upside price breakout objective is closing futures prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at the overnight high of $16.645 and then at Wednesday’s high of $16.895. Next support is seen at this week’s low of $16.415 and then at $16.25. Wyckoff's Market Rating: 2.5.