Gold prices are lower in early U.S. trading Thursday, dropping to daily lows in the immediate aftermath of some stronger-than-expected U.S. economic data released at 8:30 a.m. EST. June gold was last down $11.30 at $1,294.70 an ounce. Spot gold was last quoted down $10.90 at $1,295.25. July Comex silver last traded down $0.265 at $19.51 an ounce.

The first releases of U.S. economic reports Thursday saw a drop in weekly jobless claims, an upbeat Empire State (New York) manufacturing survey, and a tame U.S. consumer price index. This data gave the U.S. dollar a lift, further sunk the Euro currency and saw gold and silver prices sell off.

Other U.S. economic reports on tap Thursday include real earnings, industrial production and capacity utilization, the Philadelphia Fed business survey, and Treasury capital flow data. It’s likely the later releases of economic data will also have at least some impact on the market place.

In overnight news, the European Union’s gross domestic product rose a paltry 0.2% in the first quarter, year-on-year. That was half of the 0.4% growth rate expected for the bloc. Eurostat also reported consumer prices rose 0.7% in April, year-on year—well below the European Central Bank’s target of just under 2% annual inflation. The Thursday data prompted more dovish talk from the ECB.

Have you looked at a daily bar chart for the U.S. Dollar Index and Euro currency lately? Big-time price reversals have occurred the past week. The greenback has rallied sharply to a five-week high, while the Euro has slumped to a four-week low. A major factor prompting these moves is the growing likelihood the European Central Bank will ease monetary policy at its regular monthly meeting in early June. The Russia-Ukraine crisis has also prompted some flight-to-safety buying of the U.S. dollar, while at the same time producing weakness in the Euro currency due to Europe’s heavier reliance on Russian energy imports. The upside reversal of the U.S. dollar index is also a bearish underlying factor for the raw commodity sector, as most major world currencies are priced in dollars.
By the way, I do produce daily currency charts that are on Kitco.com. If you trade markets or even stocks, you are missing out on a key element of trading if you do not pay close attention to currency movements.

Wyckoff’s Daily Risk Rating: 6.0 (The Russia-Ukraine tensions are still elevated but the market place has become numb to the matter as no fresh, major developments have occurred.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,303.75 versus the previous P.M. fixing of $1,305.25.

Technically, June gold futures bulls and bears are on a level near-term technical playing field. That suggests this market could continue to trade sideways and choppy, in a range. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,315.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at this week’s low of $1,277.70. First resistance is seen at $1,300.00 and then at this week’s high of $1,309.20. First support is seen at Thursday’s low of $1,290.90 and then at $1,285.00.  

July silver futures bears still have the overall near-term technical advantage. However, prices are “basing” at lower price levels, to begin to suggest a market bottom is in place. Wednesday’s price gains gave the bulls some upside momentum as a 2.5-month-old downtrend on the daily bar chart was negated. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the April high of $20.43 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $19.045. First resistance is seen at the overnight high of $19.835 and then at this week’s high of $20.005. Next support is seen at Thursday’s low of $19.43 and then at $19.365.

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