Gold gains as USDX slips, U.S. Treasury yields dip

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(Kitco News) - Gold prices are up in midday U.S. trading Thursday, with silver prices just slightly down. The precious metals bulls have stabilized their two markets after recent selling pressure. A weaker U.S. dollar index and a decline U.S. Treasury yields today are working in favor of the metals market bulls. June gold was last up $11.00 at $2,018.30 and May silver was up $0.04 at $25.33.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed a bit lower at midday. Risk aversion remains more elevated late 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 today.

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."

The key outside markets today see the U.S. dollar index modestly lower and in a downtrend on the daily bar chart. Nymex crude oil prices are solidly lower and trading around $77.00 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 3.5%.

Technically, June gold futures bulls have the firm overall near-term technical advantage. The are keeping alive a five-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close 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

May silver futures bulls have the solid overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing 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 $25.00 and then at this week's low of $24.715. Wyckoff's Market Rating: 7.5.

May N.Y. copper closed down 535 points at 402.35 cents today. Prices closed nearer the session low. The copper bulls have the overall near-term technical advantage but are fading a bit. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 435.90 cents. The next downside price objective for the bears is closing prices below solid technical support at the April low of 392.60 cents. First resistance is seen at today's high of 407.80 cents and then at this week's high of 413.30 cents. First support is seen at 400.00 cents and then at 395.00 cents. Wyckoff's Market Rating: 6.0.