(Kitco News) – Comex gold futures prices ended the U.S. day session with solid gains and hit a three-week high Thursday, boosted on short covering and position evening ahead of Friday’s U.S. jobs report. A sharply lower U.S. dollar index also supporting good buying interest in gold. Comex August gold last traded up $15.50 at $1,414.00 an ounce. Spot gold was last quoted up $11.30 at $1,414.50. July Comex silver last traded up $0.183 at $22.655 an ounce.
Gold prices may have also seen just a bit of safe-haven demand develop Thursday when the U.S. stock indexes sold off and were trading near their daily lows. The stock indexes were posting a rebound in early afternoon trading, which did prompt gold prices to back down from their daily highs.
The U.S. dollar index slumped to a four-week low Thursday as the greenback bulls have faded badly recently, from a technical perspective. Nymex crude oil prices were higher Thursday, which was also a bullish “outside market” force for the precious metals.
Focus is on Friday’s employment report, which is arguably the most important monthly economic report the government releases. Forecasts call for the key non-farm payrolls figure to have grown by around 170,000 in May, while the overall unemployment rate is expected to be steady from the previous month, at 7.5%.
The results of the monthly monetary policy meetings of the European Central Bank and Bank of England saw no changes in interest rates. Neither central bank was expected to make any major policy announcements or interest rate changes. The Euro currency rallied and the dollar index slumped by some upbeat comments on the European Union’s economic prospects in the coming months from ECB president Draghi.
Japan’s Nikkei stock index fell again Thursday, dropping below the 13,000 level for the first time since April. One has to wonder if the big drop in the Nikkei index is a warning signal for what could come for the U.S. stock indexes.
Several reports recently have said that stronger demand for physical gold, especially from Asia, has offset the outflow of “paper” gold—exchange traded funds and Comex futures. Reports late Wednesday said the Indian government slapped a higher import tax on gold in order to stem strong consumer demand and in turn reduce its external trade imbalance.
The London P.M. gold fixing is $1,400.00 versus the previous P.M. fixing of $1,404.00.
Technically, August gold futures prices closed nearer the session high Thursday, hit a fresh three-week high and scored a bullish “outside day” up on the daily bar chart. The gold bears still have the overall near-term technical advantage, but the bulls did gain a bit of technical momentum Thursday. Prices are still in an eight-month-old downtrend on the daily bar chart. However, more gains in the near term would produce a bullish double-bottom reversal pattern on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,372.80. First resistance is seen at Thursday’s high of $1,423.30 and then at $1,430.00. First support is seen at $1,400.00 and then at Thursday’s low of $1,391.20. Wyckoff’s Market Rating: 3.5
July silver futures prices closed near mid-range Thursday and were supported by the sharply lower U.S. dollar index. Silver bears still have the overall near-term technical advantage. Prices are in an eight-month-old downtrend on the daily bar chart. However, prices have also been trading sideways for over two weeks. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $23.29 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $22.00. First resistance is seen at Thursday’s high of $22.84 and then at this week’s high of $22.915. Next support is seen at this week’s low of $22.175 and then at $22.00. Wyckoff’s Market Rating: 3.0.
July N.Y. copper closed down 545 points at 331.70 cents Thursday. Prices closed nearer the session low. The bulls were disappointed by Thursday’s bearish clue, in which copper could not post gains when the U.S. dollar index was sharply lower. Copper bulls and bears are still on a level near-term technical playing field. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 341.80 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 322.40 cents. First resistance is seen at Thursday’s high of 335.00 cents and then at today’s high of 337.10 cents. First support is seen at Thursday’s low of 330.35 cents and then at this week’s low of 328.10 cents. Wyckoff’s Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; firstname.lastname@example.org