Gold Price Supported By Bullish “Outside Market” Forces
San Francisco (May 5) Gold prices ended the U.S. day session moderately higher Tuesday, boosted by a lower U.S. dollar index and higher crude oil prices. More short-covering in the futures and bargain hunting in the cash market were featured. June Comex gold was last up $6.00 at $1,192.10 an ounce. July Comex silver was last up $0.10 at $16.525 an ounce.
Nymex crude oil futures prices pushed to a new four-month high above $60.00 a barrel Tuesday. Meantime, the U.S. dollar index resumed its price weakness. These two outside markets were in a bullish posture for the precious metals on this day, and helped to produce buying interest. Technicals suggest the greenback has peaked and that crude oil prices have bottomed.
In overnight news, Australia’s central bank cuts its key interest rate to a record low of 2% Tuesday. The news was not surprising and Asian markets saw no major price reactions.
Reports overnight said gold demand in India will rise sharply during April and May, by up to 80%, due to lower gold prices and easing government restrictions on gold imports. India is the world’s top gold consumer.
Traders are looking ahead to Friday’s U.S. employment report for April. The key non-farm payrolls number is forecast to come in at up 220,000. As Friday approaches many markets could be more subdued. Look for Friday morning to be the most active trading period of the week, in the wake of the jobs data.
The London P.M. fix is $1,197.00 versus the previous A.M. fixing of $1,187.40.
Technically, June gold futures prices closed near mid-range. Gold bears have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,214.90. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,168.40. First resistance is seen at $1,200.00 and then at $1,210.00. First support is seen at today’s low of $1,184.90 and then at this week’s low of $1,176.60. Wyckoff’s Market Rating: 3.0
July silver futures prices closed near mid-range today. The key “outside markets” were bullish for silver today as crude oil prices were higher and the U.S. dollar index was lower. Silver bears still have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $15.595.