Gold, silver down as USDX rallies, U.S. Treasury yields remain elevated

NEW YORK (June 10)  Gold and silver prices are lower in midday U.S. trading Thursday, pressured by a rally in the U.S. dollar index on this day and by U.S. Treasury yields that remain elevated. Gold down-ticked a bit more following the European Central Bank regular monetary policy meeting, at which the central bank kept its policy unchanged but said it will likely raise interest rates starting in July. August gold futures were last down $8.50 at $1,848.10. July Comex silver futures were last down $0.404 at $21.685 an ounce.

Global stock markets were mostly weaker overnight. U.S. stock indexes are weaker at midday. Trading in the stock indexes has been choppy recently, but the bulls still don’t have the power to start near-term price uptrends.

The other major data point of the week is Friday morning’s U.S. consumer price index report for May. The CPI is expected to be up 8.2%, year-on-year, after a rise of 8.3% in April. Many look for this report to run extra hot, which would be a markets-mover Friday morning.

The key outside markets today see Nymex crude oil prices slightly lower and trading around $121.50 a barrel. The U.S. dollar index is weaker in early trading. The yield on the 10-year U.S. Treasury note is fetching 3.2%. 

Technically, August gold futures bears have the overall near-term technical advantage but the bulls are still working on a fledgling price uptrend. However, they need to show more power soon to keep it alive. Bulls' next upside price objective is to produce a close 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 $1,862.40 and then at the June high of $1,878.60. First support is seen at this week’s low of $1,838.50 and then at the June low of $1,830.20.

KITCO