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Upside price action for gold, silver as greenback backs off

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(Kitco News) - Gold and silver prices are higher in early morning U.S. trading Thursday, lifted in part by a lower U.S. dollar index and by U.S. Treasury bond yields backing off a bit from this week’s highs. The near-term technical posture for both metals has also improved a bit this week, which is inviting the shorter-term futures traders to the long side of the metals. June gold futures were last up $10.30 at $1,794.60 and July Comex silver was last up $0.378 at $26.90 an ounce.

Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. Trader and investor appetite remains mostly upbeat late this week and that’s bullish for the equities.

In overnight news, The Bank of England raised its annual economic growth outlook for the U.K. to 7.25% from 5%. The BOE left its key interest rate unchanged at 0.1%, as expected.

China on Thursday said it is suspending its economic dialogue with Australia as relations between those two countries continue to deteriorate. It appears China is taking a harder line on the many nations that have had enough of China’s failure to play by international rules and norms.

In another sign of stronger consumer and commercial demand for goods that adds to the inflation argument, shipping giant Maersk reportedly said there are not enough ships in the world to meet container shipping demand. Maersk handles around 20% of global container traffic. The shortage of container ships and problems with the location of many containers has helped to more than triple container rates over the past year.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are lower and trading around $65.50 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.58%.

The key U.S. data point of the week and arguably of the month comes Friday morning with the Labor Department’s Employment Situation Report for April. Non-farm payrolls are seen up 1 million compared to a rise of 916,000 in March. The unemployment rate is seen at 5.8% versus 6.0% in March.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs and monthly chain store sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have the overall near-term technical advantage amid a price uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,754.60. First resistance is seen at $1,800.00 and then at $1,817.60. First support is seen at the overnight low of $1,781.80 and then at this week’s low of $1,765.60. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $28.00 an ounce. The next downside price objective for the bears is closing prices below solid support at last week’s low of $25.745. First resistance is seen at $27.00 and then at this week’s high of $27.24. Next support is seen at $26.50 and then at $26.15. 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.