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Gold, silver sharply up amid U.S. stock market rally, weaker USDX

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(Kitco News) - Gold prices are trading sharply higher and near daily highs in midday U.S. dealings Thursday, following the lead of the U.S. stock market that is seeing solid gains today. Confounding to many gold market watchers, the safe-haven metal of late has been tracking the U.S. stock market on some days. A weaker U.S. dollar index is also working in favor of the precious metals market bulls. June gold futures were last up $34.10 an ounce at $1,722.60. July Comex silver prices were last up $0.555 at $15.57 an ounce.

The weekly U.S. jobless claims report, out earlier this morning, showed new claims of 3.1 million in the latest week, which was in line with market expectations. Today’s number is lower than the enormous figures seen in recent weeks, but still very large. Thursday’s weekly jobless report comes just ahead of Friday morning’s monthly employment situation report from the U.S. Labor Department, which is expected to show a loss of over 20 million jobs in April and an unemployment rate north of 15%, after a jobless rate of just 4.4% reported in March.

Global stock markets were mixed to firmer in overnight trading. Traders and investors are more upbeat this week amid a strong recovery in Nymex crude oil futures prices and as U.S. and European economies begin to reopen. Still, the Covid-19 cases and deaths in the U.S. continue to rise outside of the earlier hotspots like New York City.

Another positive for traders and investors today is reports that U.S. and China trade officials will meet next week. The meeting comes after the recent rise in tensions between the world’s two largest economies, as the U.S. has accused China of hiding the Covid-19 outbreak, and even creating it in a laboratory.

China also got some upbeat economic data Thursday, as its exports unexpectedly rose in April by 3.5%, year-on-year, after declining 6.6% in March. Exports in April were forecast at down over 18%. Meantime, China’s imports fell 14.2% in April after declining only 0.9% in March.

The Bank of England today left its monetary policy unchanged, as most had expected. However, the BOE said U.K. economic growth for much of 2020 could be down 30%.

Precious metals bulls may be paying attention to at least one market advisory firm that is now calling for a “commodity super-cycle” to begin to occur in the coming months. The firm believes the combination of major global economies coming back to life in rapid fashion, after the Covid-19-induced demand shock, and the recent huge monetary stimulus measures from the big central banks of the world will produce huge demand for raw commodities that will drive their prices sharply higher. The naysayers to this postulation say the 2008 financial crisis that saw similar—although not nearly as extreme—conditions did not produce problematic price inflation at all, and in fact the world’s major economies struggled with inflation that was too low for many years. This longtime market watcher’s perspective on the matter: I lean on the side of problematic price inflation, thinking of the old saying, “no good deed (central bank stimulus) goes unpunished.”

The other important outside market Thursday sees Nymex crude oil prices higher and trading around $25.25 a barrel in June futures. Prices have more than tripled from the recent low.    

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have the firm overall near-term technical advantage and gained more power today amid a two-month-old price uptrend in place on the daily bar chart. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,666.20. First resistance is seen at this week’s high of $1,726.00 and then at $1737.00. First support is seen at $1,700.00 and then at this week’s low of $1,683.00. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have regained the slight overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $16.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at $15.75 and then at $15.94. Next support is seen at $15.25 and then at $15.00. Wyckoff's Market Rating: 5.5.

July N.Y. copper closed up 305 points at 237.80 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 250.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 221.70 cents. First resistance is seen at the April high of 239.50 cents and then at 242.50 cents. First support is seen at today’s low of 233.40 cents and then at 230.00 cents. Wyckoff's Market Rating: 6.0.

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.