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Gold price firmer as bulls stabilize the market

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(Kitco News) - Gold and silver prices are modestly up in early U.S. trading Thursday, as the precious metals market bulls have stabilized their markets after the recent selling pressure. A dip in the U.S. dollar index and in U.S. Treasury yields today are also working in favor of the metals market bulls. June gold was last up $6.00 at $2,013.30 and May silver was up $0.044 at $25.42.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk aversion is more elevated this week, which has helped to prompt selling pressure in much of the raw commodity sector, led by crude oil prices dropping to a three-week low overnight.

Said analyst Craig Erlam of OANDA: "We're now at a pivotal point in the (central bank monetary policies) tightening cycle, one made all the more difficult by the mini banking crisis last month and the ripple effects it will have on credit and the economy over the course of the rest of the year. Central banks, the Fed in particular, are now at even greater risk of overtightening just as the data may show price pressures easing considerably. The fear of that not materializing will probably drive another round of rate hikes next month, after which discussions will likely be far more balanced. It's this uncertainty that appears to be driving the most recent period of choppy trading."


Sticky UK inflation raises fear that the Fed is not done yet, keeps gold down

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are lower and trading around $77.75 a barrel. Oil prices have backed off recently on demand concerns amid global economic recession worries. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.558%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales, and leading economic indicators. Several Federal Reserve officials are also scheduled to speak today.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls still have the firm overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart, but the bulls need to show more power soon to keep it alive. Bulls' next upside price objective is to produce a close in June futures above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at this week's high of $2,028.00 and then at the March high of $2,031.70. First support is seen at $2,000.00 and then at this week's low of $1,980.90. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $27.00. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at this week's high of $25.71 and then at $26.00. Next support is seen at today's low of $25.155 and then at $25.00. 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.