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Gold, silver prices sharply up as U.S. jobless claims skyrocket

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(Kitco News) - Gold and silver prices are trading sharply up in early U.S. trading Thursday and moved to fresh session highs after the U.S. government reported a huge increase of 6.6 million in jobless claims in the latest reporting week. June gold futures were last up $30.70 an ounce at $1,621.80. May Comex silver prices were last up $0.626 at $14.61 an ounce.

The big U.S. data point this week will not be Friday’s monthly employment report (usually the most important data point of the month) but instead Thursday morning’s weekly jobless claims report. The 6.6 million rise was about double the expected gain of just over 3 million, after rising 3.2 million last week. The weekly claims report further confirms U.S. economy has been severely crippled by the coronavirus outbreak.

Global stock markets were mixed in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins, following Wednesday’s sharp losses.

The important outside markets today see Nymex crude oil prices sharply higher and trading around $22.25 a barrel, on short covering and perceived bargain hunting after hitting an 18-year low of $19.27 a barrel Monday. The rally in oil prices today is helping to lift the U.S. stock indexes early on. There are ideas the U.S., Russia and Saudi Arabia may be close to agreement on a deal to halt the Saudi-Russia oil-price war. President Trump said he is hopeful an agreement between Saudi Arabia and Russia will be reached soon. There are more than a few oil market watchers that are skeptical the Russians and Saudis will come to any significant agreement to reduce their oil output levels. Both major oil-producing countries hate the U.S. shale oil industry and are very likely enjoying watching U.S. oil companies suffer. Reports also said China will be buying crude oil for its strategic petroleum reserve. China reportedly at present has over 1 billion barrels of empty oil storage capacity, at the same time the U.S. has very little to none.

The U.S. dollar index is slightly down early this morning but the bulls are having a good week, overall. When the going gets really, really tough it appears global traders and investors still seek out the greenback. The 10-year U.S. Treasury note yield is trading around 0.59% Thursday morning, after trading above 1.0% last week. Declining U.S. Treasury yields recently are a sign that U.S. bond traders (arguably the smartest traders in the world) expect more serious markets/economic turmoil on the horizon, including suggesting that most markets have not yet fully priced in the eventual global economic toll the coronavirus sickness will exact.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ISM New York report on business, and manufacturers’ shipments and inventories.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls still have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,650.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,576.00. First resistance is seen at the overnight high of $1,623.90 and then at $1,635.00. First support is seen at $1,600.00 and then at today’s low of $1,595.20. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bears still have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.00. First resistance is seen at this week’s high of $14.71 and then at $15.00. Next support is seen at this week’s low of $13.895 and then at $13.50. Wyckoff's Market Rating: 4.5.

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.