Modest price gains for gold, silver ahead of key data

The U.S. data point of the week, if not the month, comes with Friday’s May employment situation report from the Labor Department. The key non-farm payrolls number is seen coming in at up 178,000 versus the April report showing a gain of 175,000 jobs.

Investors and traders are also anticipating Thursday’s European Central Bank (ECB) meeting. The expectation is that the ECB will get ahead of the central-bank pack and cut its main interest rate by 25 basis points.

Asian and European stock indexes were mixed to lower overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

In overnight news, the Eurozone April producer price index was reported down 5.7%, year-on-year, which was close to market expectations.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are slightly up and trading around $73.40 a barrel. The benchmark 10-year U.S. Treasury note yield is presently around 4.3%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. services PMI, the ISM report on business services, the global services PMI, and the weekly DOE liquid energy stocks report.

Technically, August gold bulls have the overall near-term technical advantage but have faded. 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 the contract high of $2,477.00. 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 the overnight high of $2,361.70 and then at this week’s high of $2,375.50. First support is seen at the overnight low of $2,345.30 and then at this week’s low of $2,334.80. Wyckoff’s Market Rating: 6.5.

July silver futures bulls have the overall near-term technical advantage but are fading. A four-week-old 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 this week’s low of $29.505 and then at $29.00.

Posted by:

Jack Dempsey, President

401 Gold consultants LLC

jdemp2003@gmail.com