Mild price pressure on gold, silver as USDX strengthens
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(Kitco News) - Gold and silver prices are modestly lower in early U.S. dealings Wednesday. A resurgent U.S. dollar index that hit a six-week high overnight and is trending higher is a significantly bearish outside market element working against the metals market bulls at mid-week. June gold was last down $1.80 at $1,991.20 and July silver was down $0.038 at $23.855.
Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Trader and investor risk appetite is a bit keener at mid-week. The U.S. debt-limit extension talks held Tuesday afternoon were upbeat. President Joe Biden and House Speaker Kevin McCarthy named top emissaries to negotiate a deal to avert an unprecedented national default. Biden cut short an upcoming overseas trip in hopes of closing an agreement before a June 1 deadline.
The marketplace continues to monitor comments made this week by Federal Reserve officials. While their opinions have been mixed regarding continuing to tighten U.S. monetary policy or to pause, traders and investors generally view their collective remarks as still leaning slightly hawkish.
In overnight news, the Euro zone April consumer price index came in at up 7.0%, year-on-year, which was right in line with market expectations.
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The key outside markets today see the U.S. dollar index higher and the greenback bulls have momentum. Nymex crude oil prices are firmer and trading around $71.15 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.528%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the May high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,980.00. First resistance is seen at $2,000.00 and then at $2,007.00. First support is seen at the overnight low of $1,986.80 and then at $1,980.90. Wyckoff's Market Rating: 7.0
The silver bulls and bears are on a level overall near-term technical playing field but the bulls are fading. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $24.00 and then at this week’s high of $24.395. Next support is seen at today’s low of $23.76 and then at $23.50. Wyckoff's Market Rating: 5.0.