Gold Firmer as US Posts Weak Data

Gold prices are modestly higher in early U.S. trading Thursday, on some bargain hunting in the cash, or spot, market and some short covering in the Comex futures market. A lower U.S. dollar index is also a bullish daily factor for the precious metals Thursday. June Comex gold was last up $3.50 at $1,204.60 an ounce. May Comex silver was last up $0.121 at $16.405 an ounce.

Nymex crude oil prices are weaker Thursday morning after hitting a four-month high Wednesday. Crude oil prices are in a four-week-old uptrend on the daily bar chart, too. There are significant, early technical clues that a market bottom is in place for crude oil. The market place is starting to take note of ideas crude oil prices have bottomed out. Several raw commodity markets have seen recent price-stabilization, or even fledgling uptrends, due in part to their sector leader crude oil’s price recovery.

The U.S. dollar index is weaker in early North American trading Thursday. The index has this week again come under selling pressure. If crude oil prices have indeed bottomed out, that also a strong clue the U.S. dollar index has topped out. Again, the greenback putting in a market top would be a bullish development for the raw commodity sector, as most commodities are priced in U.S. dollars on the world markets.

Reports this week say the Greek and International Monetary Fund/European Union officials debt restructuring negotiations are not going well. Greece has reportedly asked the IMF if it could delay a debt payment and the IMF reportedly refused. The Standard & Poors credit agency on Wednesday lower their ratings for Greece further into junk territory. Greek bond yields have risen significantly recently, due to the doubts about Greece being able to pay its debts without serious economic reforms.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza