Steady price action in gold, silver as U.S. debt-limit talks loom

(Kitco News) – Gold and silver prices are trading close to unchanged levels on the day in early U.S. dealings Monday. Traders are awaiting fresh fundamental inputs as a busy data week lies ahead, including negotiations aimed at keeping the U.S. government from defaulting on its debt obligations. June gold was last up $0.20 at $2,020.00 and July silver was up $0.031 at $24.185.

Focus this week is on the U.S. debt-limit extension talks between the White House and Congress. Reports said congressional leaders and President Biden will likely meet Tuesday. The U.S. government could run out of money as soon as June 1. U.S. Treasury Secretary Yellen said over the weekend that progress is being made between Democrats and Republicans, in order to avoid a financially catastrophic U.S. government default on its debt obligations.

Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.

In overnight news, two gold-mining companies are set to merge, as Newmont Mining is buying out Australia’s Newcrest Mining, to make the biggest gold-mining buyout deal ever and create the largest gold-mining operation in the world.

China’s central bank Monday said China’s economic growth in the second quarter will rebound sharply and that inflation levels will stay low due to less demand. In other news, Euro zone March industrial production fell 1.4%, year-on-year, which was more than forecast. The European Union sees Euro zone annual inflation at up 5.8% in 2023, up from a 5.6% rise in its previous forecast.

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are firmer and trading around $70.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.485%.

U.S. economic data due for release Monday is light and includes the Empire State manufacturing survey and Treasury international capital data.

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 May high of $2,085.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,980.00. First resistance is seen at Friday’s high of $2,027.80 and then at $2,040.00. First support is seen at last week’s low of $2,005.70 and then at $2,000.00. Wyckoff’s Market Rating: 7.5

The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Friday’s high of $24.405 and then at $24.735. Next support is seen at last week’s low of $23.91 and then at $23.50. Wyckoff’s Market Rating: 5.0.