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Gold, Silver Up As U.S. Dollar Eroding

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(Kitco News) - Gold and silver prices are firmly higher in early-afternoon U.S. trading Thursday, lifted in part by the U.S. dollar index that is selling off again today. Gold is poised to close at a 3.5-month high close today, with silver at a four-week high close. Chart-based buying was also featured in both metals today 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 $10.30 an ounce at $1,343.80. July Comex silver prices were last up $0.119 at $14.91 an ounce.

The European Central Banks left interest rates unchanged at its regular monetary policy meeting, but the meeting leaned dovish. The ECB extended the length of time that bank officials expect interest 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.

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 solidly lower. 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 near steady and trading around $51.50 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.

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures prices closed near the session high today. The bulls have the firm overall near-term technical advantage and regained upside momentum today. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,348.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,320.00. First resistance is seen at $1,348.90 and then at the February high of $1,361.50. First support is seen at today’s low of $1,331.30 and then at $1,325.00. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures prices closed nearer the session high today and closed at a four-week high close. The silver bears still have the overall near-term technical advantage. However, a three-month-old downtrend on the daily bar chart has been negated this week to suggest a market bottom is in place. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $15.04 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $14.265. First resistance is seen at $15.00 and then at $15.04. Next support is seen at today’s low of $14.73 and then at this week’s low of $14.565. Wyckoff's Market Rating: 3.5.

July N.Y. copper closed up 140 points at 263.65 cents today. Prices closed near mid-range on tepid short covering after hitting a five-month low earlier this week. The copper bears have the solid overall near-term technical advantage. Prices are in a steep seven-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 277.75 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 256.10 cents. First resistance is seen at 265.00 cents and then at this week’s high of 267.45 cents. First support is seen at this week’s low of 261.10 cents and then at 260.00 cents. Wyckoff's Market Rating: 2.0.

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