Gold price near steady as busy data week lies ahead

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(Kitco News) – Gold prices are holding around unchanged and silver prices are solidly up in early U.S. trading Monday. Gold traders are pausing ahead of a very important week for economic data releases. The marketplace is so far taking in stride the weekend news of the second-largest U.S. bank failure in history. June gold was last down $1.70 at $1,997.40 and July silver was up $0.299 at $25.525.

On tap this week is the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday and ends Wednesday afternoon. The FOMC is expected to raise the key U.S. interest rate by 0.25%. The European Central Bank also meets Thursday. The ECB is also expected to raise its main interest rate by a quarter-point. Also, on Friday comes the U.S. employment situation report from the Labor Department. Corporate earnings reports continue to flow out this week, including Apple’s results.

The U.S. government over the weekend took over the troubled First Republic Bank and then sold it to JP Morgan. First Republic’s demise is the second-largest U.S. bank failure ever, after Washington Mutual’s collapse in 2008. The news was not a big shock to the marketplace, following last week’s dismal earnings report from First Republic and the bid drop in its stock price recently.

Global stock markets were mostly higher overnight. Some European markets were closed for a holiday. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The U.S. stock index bulls had a good week last week, including the S&P 500 and Nasdaq indexes on Friday closing at technically bullish weekly and monthly high closes.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are lower and trading around $75.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.462%.

U.S. economic data due for release Monday includes the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing and construction spending.

Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the April high of $2,063.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at $2,000.00 and then at last week’s high of $2,020.20. First support is seen at the overnight low of $1,985.70 and then at last week’s low of $1,980.90. Wyckoff’s Market Rating: 7.0

The silver bulls have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at the April high of $26.435. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at $25.805 and then at $26.00. Next support is seen at the overnight low of $25.195 and then at $25.00. Wyckoff’s Market Rating: 7.0.