More profit taking for gold, silver to end the trading month

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(Kitco News) - Gold and silver prices are modestly lower in early morning U.S. trading Friday, on some profit taking and book-squaring on this last trading day of the month of May. Don’t be surprised to see the bulls step in and buy these mild dips in gold and silver prices, as the technical postures for both metals remain bullish. June gold futures were last down $4.80 at $1,890.90 and July Comex silver was last down $0.335 at $27.59 an ounce.

The U.S. data point of the day Friday is the just-released report on April personal consumption (consumer spending). The report showed a rise of 0.5% in spending, which was right in line with the consensus forecast of up 0.5% from March. The April personal consumption/expenditures price index was up 0.6% from March and up 3.6% year-on-year. The precious metals markets are showing no significant reactions to the data.

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. This week has seen the marketplace appear less concerned about problematic price inflation occurring in the coming months.

President Biden’s budget is set to be released sometime today. It will raise federal spending to $6 trillion in the coming fiscal year and to over $8 trillion in the next fiscal year, reports say.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are higher, near this year’s high, and trading around $67.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.611%.

Other U.S. economic data due for release Friday includes the advance economic indicators report, the Chicago purchasing managers index, and the University of Michigan consumer sentiment survey.

Technically, June gold futures bulls have the solid 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 $1,969.10. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at this week’s high of $1,913.30. First support is seen at this week’s low of $1,873.20 and then at $1,860.00. Wyckoff’s Market Rating: 7.0

The silver bulls have the firm overall near-term technical advantage amid a two-month-old price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $30.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at $28.00 and then at this week’s high of $28.34. Next support is seen at $27.265 and then at $27.00. Wyckoff’s Market Rating: 7.0.