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Gold Firmer On Corrective Bounce From Recent Pressure

Kitco News

(Kitco News) - Gold prices are modestly higher in early U.S. trading Thursday, on a technical rebound from the recent selling. Prices have been trading choppy and sideways for the past week, amid a lack of new, bullish fundamental developments. June Comex gold was last up $4.90 an ounce at $1,258.00. July Comex silver was last up $0.093 at $17.21 an ounce.

In overnight news, reports said OPEC oil cartel officials and the Russians have just agreed to extend their current crude oil production cuts by another nine months, but not make deeper cuts in production. The move was expected.

Market watchers are still digesting the Federal Reserve’s FOMC minutes from the early-May meeting, which were released Wednesday afternoon. The minutes were deemed just a bit dovish on U.S. monetary policy and suggested to some that the Fed may not make a move to raise interest rates at the June FOMC meeting. The precious metals are seeing some minor support coming from the minutes. Still, most expect more slight interest rate increases from the Fed this year. The Fed made its last interest rate increase in March.

The key outside markets on Thursday morning find the U.S. dollar index slightly lower. The greenback bears remain in firm near-term technical control. Meantime, Nymex crude oil futures prices are lower on a corrective pullback from recent gains. Crude oil prices have trended solidly higher recently.

U.S. economic data due for release Thursday includes the weekly jobless claims report, leading economic indicators and the Kansas City Fed manufacturing survey.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have the slight overall near-term technical advantage, but they need to show fresh power soon to keep it. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the May low of $1,214.30. First resistance is seen at last week’s high of $1,265.00 and then at $1,268.00. First support is seen at $1,245.00 and then at $1,241.50. Wyckoff’s Market Rating: 5.5

July silver bears have the overall near-term technical advantage. However, prices hit a three-week high Monday and the recent upside price action suggests a near-term market bottom is in place. 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 the May low of $16.06. First resistance is seen at this week’s high of $17.305 and then at $17.50. Next support is seen at $17.00 and then at this week’s low of $16.84. Wyckoff's Market Rating: 3.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.