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Upside price action in gold, silver as USDX, bond yields dip

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(Kitco News) - Gold and silver prices are up in early U.S. trading Thursday, supported by a dip in the U.S. dollar index and in U.S. Treasury bond yields on this day. August gold futures were last up $12.80 at $1,861.30. July Comex silver futures were last up $0.33 at $22.25 an ounce.

The just-released ADP national employment report for May showed a less-than-expected rise of 128,000. That report is a precursor to Friday morning’s U.S. employment situation report for May, which is expected to show the key non-farm jobs number at up 328,000, after a rise of 428,000 reported in April. The U.S. unemployment rate is expected to be 3.5% versus 3.6% reported in April. The ADP report’s jobs number has not been a reliable forecaster for the more important non-farm jobs number that follows it.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. The U.S. stock index bears are still enjoying the firm overall near-term technical advantage, as risk appetite in the marketplace is not robust.

In overnight news, the Euro zone reported its April producer price index was up a stunning 37.2%, year-on-year. Most of that was rising energy costs, but excluding energy the PPI was still up 15.6% annually.

Yellen: 'I was wrong' about inflation's path

The key outside markets today see Nymex crude oil prices lower and trading around $114.50 a barrel. An OPEC-plus meeting today will be closely monitored. The cartel is expected to raise its collective oil production, and may sanction Russian oil. The U.S. dollar index is lower in early trading. The yield on the 10-year U.S. Treasury note is fetching 2.915%.

It’s a busy day for U.S. economic data released Thursday, including the Challenger job-cuts report, the ADP national employment report, the weekly jobless claims report, revised productivity and costs, manufacturers’ shipments and inventories, the weekly DOE liquid energy stocks report and monthly chain store sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the August gold futures bears have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,785.00. First resistance is seen at this week’s high of $1,867.90 and then at $1,875.00. First support is seen at the overnight low of $1,846.50 and then at this week’s low of $1,830.20. Wyckoff's Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at $22.475 and then at $23.00. Next support is seen at today’s low of $21.785 and then at this week’s low of $21.41. Wyckoff's Market Rating: 3.5.

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