Gold price up as bulls step in to buy the dip

(Kitco News, Tues. June 7th, 2022) – Gold prices are moderately higher in early U.S. trading Tuesday as the bulls are doing some perceived bargain hunting after the recent price declines. A weaker U.S. stock market today and still-elevated crude oil prices are working in favor of the metals market bulls, as are keen worries about problematic inflation. August gold futures were last up $7.10 at $1,850.70. July Comex silverfutures were last down $0.037 at $22.055 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.

In overnight news, Australia’s central bank somewhat surprised the marketplace with a larger-than-expected interest rate increase. The Royal Bank of Australia raised a key interest rate range by 50 to 75 basis points.

U.S. Treasury Secretary Janet Yellen will be grilled by U.S. lawmakers Tuesday and Wednesday as she will testify to Congress on the Biden administration’s budget request and its plans to deal with rising inflation.

Two key data points of the week are the European Central Bank’s regular monetary policy meeting Thursday, at which the central bank is expected to lay out plans for tightening its monetary policy. On Friday the U.S. consumer price index report for May is set for release. The CPI is expected to be up 8.2%, year-on-year, after a rise of 8.3% in April.

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The key outside markets today see Nymex crude oil prices slightly down and trading around $118.50 a barrel. The U.S. dollar index is firmer in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.02%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, the international trade report and consumer credit.

Technically, the August gold futures bears have the overall near-term technical advantage. However, a 2.5-month-old downtrend on the daily bar chart has been negated and the are working on a price uptrend on the daily chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at this week’s high of $1,861.20 and then at last week’s high of $1,878.60. First support is seen at the overnight low of $1,838.50 and then at last week’s low of $1,830.20. Wyckoff’s Market Rating: 4.0

July silver futures bears have the overall near-term technical advantage. However, the bulls are working on a price uptrend on the daily chart but need to show more power soon to keep it alive. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $23.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at this week’s high of $22.565 and then at $23.00. Next support is seen at the overnight low of $21.84 and then at $21.50.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com