(Kitco News) - Gold prices are posting slight losses in early U.S. trading Monday, with silver prices trading higher. The precious metals bulls are trying to stabilize their markets after Friday’s beat-down in the wake of a stronger U.S. jobs report that goosed the U.S. dollar index and U.S. Treasury yields. August gold was last down $2.70 at $2,322.30. July silver was last up $0.45 at $29.89.
It’s an important U.S. data week, highlighted by inflation readings and the FOMC meeting. Barron’s says in a story today: “After Friday’s jobs shocker, it’s hard to imagine a bigger event than Federal Reserve Chairman Jerome Powell’s press conference on Wednesday for shaping the outlook for investors the rest of this year.” U.S. Treasury yields and the U.S. dollar index spiked higher after the hotter jobs report Friday morning. The FOMC is not expected to take any new monetary policy action this week. The marketplace is putting odds at around 60% that the Fed will make a rate cut before November.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
Reports over the weekend said Saudi Arabia’s “petrodollar” agreement with the U.S., which expired Sunday, may not be renewed. The 50-year agreement was put in place in 1974. The petrodollar agreement saw Saudi Arabia sell its oil exclusively in U.S. dollars, with the U.S. promising military security and economic development. The reports said Saudi Arabia is now working more closely with China, which is trying to undermine the global dominance of the greenback.
The key outside markets today see the U.S. dollar index solidly higher and hit a four-week high. Nymex crude oil prices are near steady and trading around $75.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently at 4.46%.
U.S. economic data due for release Monday includes the employment trends index.
Technically, August gold bulls have lost their overall near-term technical advantage. A bearish double-top reversal pattern has formed on the daily bar chart to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at last week’s high of $2,406.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $2,308.70. First resistance is seen at $2,335.00 and then at $2,350.00. First support is seen at last week’s low of $2,304.20 and then at $2,300.00. Wyckoff's Market Rating: 5.0.
July silver futures bulls have the overall near-term technical advantage but have faded. A price uptrend on the daily bar chart has been negated to suggest a near-term market top is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $32.75. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $30.00 and then at $30.50. Next support is seen at last week’s low of $29.22 and then at $29.00. Wyckoff's Market Rating: 6.5.
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