Gold And Silver Prices Get Slight Lift As Greenback Sets Back

New York (May 30)  Gold and silver prices were trading modestly higher in early-afternoon U.S. dealings Wednesday. A sharp drop in the U.S. dollar index today was a bit supportive for the precious metals markets. However, the USDX hit a 10.5-month high on Tuesday. Several fundamental factors are in play in the marketplace at mid-week, but few seem to be having much impact on the precious metals at this point. June Comex gold futures were last up $2.20 an ounce at $1,306.20. July Comex silver was last up $0.167 at $16.54 an ounce.

The key data point for today was the national employment report for May, which came in at up 178,000. The report came in close to the forecast for up 187,000. The ADP report is the precursor to the more important Labor Department employment situation report on Friday morning. The precious metals and other markets paid little attention to today’s ADP.

There are still geopolitical concerns at mid-week. The U.S. continues to ratchet up the pressure on China, regarding trade issues. Worries about Italy’s future in the European Union are also causing anxiety among European investors. More developments on these key matters are likely yet this week, which could move markets, including the safe-haven metals.

The other key “outside market” today finds Nymex crude oil prices solidly higher on a corrective bounce after slumping to a six-week low on Tuesday. The recent steep downdraft suggests the market has put in at least a near-term top.

Technically, gold prices are still in a two-month-old downtrend on the daily bar chart, but just barely. This week’s price action will determine whether the downtrend continues or is negated. The gold bears have the slight overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,332.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,286.80. First resistance is seen at last week’s high of $1,312.60 and then at $1,320.00.

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