Routine price corrections pressuring gold and silver Thursday

June 3, 2021

New York (Jun 3)  Gold and silver prices are lower in early morning U.S. trading Thursday, on normal corrective pullbacks in existing price uptrends. Gold hit a five-month high Tuesday. The technical postures for both metals remain fully bullish. It’s a busy day for U.S. economic data and the precious metals could be buffeted on data that misses market expectations. August gold futures were last down $15.60 at $1,893.10 and July Comex silver was last down $0.364 at $27.845 an ounce.

Global stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The U.S. indexes are trading not far below their recent record highs. Concerns about rising inflation are still lingering after the Federal Reserve’s beige book Wednesday afternoon said supply chain bottlenecks are causing some product shortages and leading to higher prices, and such could continue the rest of this year.

In overnight news, the Euro zone’s May services purchasing managers index (PMI) came in at 55.2 versus 50.5 in April. A reading above 50.0 suggests growth in the sector.

Traders are gearing up for what is arguably the most important U.S. economic report of the month, Friday morning’s Employment Situation Report for May from the Labor Department. The key non-farm payrolls number is forecast to come in up around 675,000 after paltry rise of 266,000 in April. The unemployment rate for May is seen at 5.9% versus 6.1% in April.

The key outside markets today see the U.S. dollar index higher on a corrective bounce from recent selling pressure. Nymex crude oil prices are a bit weaker after hitting a 2.5-year high earlier this week, and are trading around $68.65 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.604%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the ADP national employment report, the Challenger job-cuts report, weekly jobless claims, the ISM report on business services, the U.S. services purchasing managers index (PMI), the weekly DOE liquid energy stocks report, the global services PMI, and monthly chain store sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures bulls have the firm overall near-term technical advantage amid a two-month-old price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the January high of $1,971.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at the overnight high of $1,912.30. First support is seen at $1,884.30 and then at $1,875.00.

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