More price upside for gold, silver than USDX, US bond yields fall

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(Kitco News) – Gold and silver prices were modestly higher in early U.S. trade Tuesday, boosted by recent sharp losses in the U.S. Dollar Index, which hit another four-week low overnight. Falling US Treasury yields recently are also optimistic for precious metals markets. Gold and Silver are also seeing their near-term technicals improving a bit to begin attracting fresh chart-based buying interest. June gold futures were last up $9.80 to $1,857.40. July Comex silver futures were last up $0.207 to $21.93 an ounce.

Global equity markets were mostly lower overnight. US stock indices are poised for lower opens as the New York daily session gets underway. US equity indices are in or near bear market territory, defined as 20% or more below their recent highs. Geopolitical and inflation concerns are keeping bulls in stock markets squeamish. These are also bullish elements for the safe-haven metals.

In overnight news, China laid out a sweeping plan to shore up its economy, which has been hit hard by Covid lockdowns. The market was unimpressed and reacted little to the plans.

Later today, Fed Chair Jerome Powell will address an economic summit in Las Vegas.

Major outside markets see Nymex crude futures prices slightly higher today, trading around $110.50 a barrel. Meanwhile, the US dollar index is significantly weaker, hitting a four-week low in early trade. The yield on the 10-year US Treasury is 2.797%.

U.S. economic data to be released on Tuesday includes the weekly Johnson Redbook and chain retail reports, the U.S. Flash Manufacturing Purchasing Managers Index (PMI), the Flash Services PMI, the Richmond Fed business survey, new home sales and the semi-annual economic forecast from ISM.

Technically, June gold futures bears have the overall short-term technical advantage, but bulls have gained momentum. A 2.5 month old downtrend is still present on the daily bar chart. However, further gains this week would derail the uptrend. The bulls’ next upside target is to close the June futures above the solid resistance at $1,900.00. Bears’ next short-term downside target is to push futures prices below solid technical support at the May low of $1,785.00. Initial resistance is seen at this week’s high of $1,864.20 and then $1,875.00. Initial support is seen at the weekly low of $1,843.30 and then $1,830.60. Wyckoff’s market rating: 3.5

The July silver futures bears have the overall short-term technical advantage. Prices are in a 2.5 month old downtrend on the daily bar chart. However, further gains this week would derail the uptrend. The silver bulls’ next upside target is a close above the solid technical resistance at $23.00 an ounce. The next downside target for the bears is a close below the solid support at the May low of $20.42. Initial resistance is seen at this week’s high of $22.205 and then $22.50. The next support is seen at the overnight low of $21.645 and then $21.50. Wyckoff’s market rating: 3.0.