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Gold erases early losses as bulls once again buy the dip

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(Kitco News) - Gold prices are trading moderately up in midday U.S. trading Thursday, and have gotten back early declines that came following an upbeat U.S. employment report for June that showed more jobs growth than expected and a lower unemployment rate. The gold market bulls continue to show resilience, knowing the yellow metal’s technical posture is fully bullish—suggesting more upside in the near term. August gold futures were last up $8.80 an ounce at $1,788.70. September Comex silver prices were last up $0.067 at $18.285 an ounce.

The Labor Department’s employment situation report showed a non-farm payrolls rise of 4,8 million and an unemployment rate of 11.1% in June. The key non-farm payrolls number was expected to be up 3.15 million, with the unemployment rate forecast at 12.4%.

It's a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. Some U.S. markets will close early today.

Global stock markets were mostly up in overnight trading. The U.S. stock indexes are solidly higher at midday, with the Nasdaq index hitting another record high. Recent U.S. and global economic data suggests businesses’ recoveries from the Covid-19 pandemic damage to them is more rapid than initially expected. Also, the Federal Reserve’s FOMC minutes released Wednesday afternoon reiterated the Fed will likely continue to work to stimulate the U.S. economy through monetary policy measures. These bullish elements are for now outweighing the bearish specter of a Covid-19 resurgence in many U.S. states that is forcing some of those states to again shut down some of their businesses. However, there are fresh reports that a vaccine for the infection is showing promise.

The important outside markets today see Nymex crude oil prices higher and trading around $40.20 a barrel. The U.S. dollar index is firmer at midday today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.7% level.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at this week’s high of $1,807.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,754.00. First resistance is seen at today’s high of $1,791.70 and then at $1,800.00. First support is seen at today’s low of $1,766.30 and then at $1,754.00. Wyckoff's Market Rating: 8.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $19.125 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the June low of $17.175. First resistance is seen at today’s high of $18.40 and then at $18.50. Next support is seen at $18.00 and then at $17.75. Wyckoff's Market Rating: 7.5.

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.