Gold and silver see routine pauses in price uptrends

New York (Jun 2)  Gold and silver prices are not trading far from unchanged in early morning U.S. trading Wednesday. The two metals are in a normal pause after gold hit a five-month high Tuesday. The technical postures for both metals remain fully bullish amid price uptrends in place on the daily bar charts. August gold futures were last down $0.50 at $1,903.20 and July Comex silver was last down $0.122 at $27.985 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. There are no major geopolitical flare-ups at present, while trader and investor risk aversion is not keen. That’s a scenario that should continue to support upside price action in most global stock markets.

In overnight news, the Euro zone’s April producer price index was reported up 1.0% from March and up 7.6% year-on-year. Those are numbers that are starting to fall in line with many analysts and economists who have been predicting inflationary price pressures will become more acute in the coming months.

Turkey’s president has called for lower interest rates, saying that reducing the burden of interest costs on producers would lead to lower inflation in the future. His call for an easing of monetary policy helped push the Turkish lira to a record low against the U.S. dollar Wednesday.

The key outside markets today see the U.S. dollar index higher on a corrective bounce from recent selling pressure. Nymex crude oil prices are higher and near the 2.5-year high hit on Tuesday, trading around $68.50 a barrel. At an OPEC meeting Tuesday the cartel said it would gradually ramp up its collective oil production and predicted a rise in global oil demand in the coming months. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.606%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Johnson Redbook weekly retail sales report, the IDB/TIPP economic optimism index, domestic auto industry sales and the Federal Reserve’s beige book.

Technically, August gold futures bulls have the firm overall near-term technical advantage amid a two-month-old price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the January high of $1,971.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at this week’s high of $1,919.20 and then at $1,925.00. First support is seen at this week’s low of $1,894.50 and then at $1,884.30.

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