Gold and silver trading outlook: futures steady ahead of the three-day US weekend, Ukraine election eyed

Gold and silver futures were steady during early trade in Europe today, after mixed US data was not enough to impact precious metals. Stocks continued to advance, and assets at the SPDR remain at a multi-year low. Ukraine is holding a presidential election on Sunday, and the conflict inflicted more casualties yesterday.

Gold futures for delivery in June traded for $1 294.2 per troy ounce at 8:32 GMT on the COMEX in New York today, down 0.06%. Daily high and low stood at $1 295.7 and $1 293.2 per troy ounce, respectively. Yesterday the yellow metal rose by 0.54%, while so far this week the contract has added 0.13%, reaching a three-week trough at $1 282.9 per troy ounce on Wednesday.

Meanwhile, silver contracts for July stood at $19.475 per troy ounce, losing 0.23%. Daily high and low were at $19.525 and $19.415 per troy ounce, respectively. Yesterday silver gained 0.94% and so far this week the contract has added 0.99%.

The US economy posted some mixed signals this week. Initial jobless claims stood at 326 000, much more than the forecast 310 000, after last week new claims reached a seven-year low of an upward revised 298 000. Continuing claims were reported at 2.563 million for a 13 000 decrease.

Elsewhere, manufacturing PMI for May grew to 56.2, well-ahead of expectations, while existing home sales also added, but less than expected, for a 1.3% monthly gain. Data on new home sales will be revealed later today.

“U.S. data continues to be mixed, which doesnt help investment decisions, and that keeps gold in a tight trading range,” said for Bloomberg Lv Jie, a Hangzhou-based analyst at Cinda Futures Co.

Despite the mixed signals, US stocks continued to gain on Thursday. S&P 500 added 0.24% on Thursday, for a total of 0.78% increase for the week so far, and is just 0.51% short of the all-time high. Dow 30 gained 0.06% and is 1.15% below the record peak, while Nasdaq 100 rose by 0. 42% to bring the weeks tally to a 1.77% growth, and is 2.20% away from the highest level on record.

Assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, remained at 776.89 tons, the lowest level since December 2008. The fund has lost over 30 tons in the last month, as investor interest in havens dwindles, pressured by the growing US economy.

Previously, precious metals were also eased by news that India, the second-top consumer, relaxed imports restrictions yesterday, allowing 7 more companies to ship to the country. The news comes after the World Gold Council revealed demand in China and India had shrunk for the first quarter of 2014.

Ukraine

Ukraine’s military experienced the deadliest attack on its troops early on Wednesday. At least 14 soldiers were killed and a reported two dozen injured. Ukrainian officers told the BBC that the attack was carried out by mercenaries, and not the separatists.

Earlier, a pro-Russian leader in Donetsk went on Facebook and Twitter to deny that the rebels had attacked the military checkpoint.

Ukraine is preparing to hold a presidential election on May 25, and in the run-up to the vote all developments will be closely watched. Kiev hopes the election will soften the conflict, though the eastern rebels have long since declared they will boycott the vote, and will try to incorporate the separatist regions in the Russian Federation.

Technical view

According to Binary Tribune’s daily analysis, in case Gold June futures on the COMEX manage to breach the first resistance level at $1 302.7, the contract will probably continue up to test $1 310.4. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 316.7.

If the contract manages to breach the first key support at $1 288.7, it will probably continue to slide and test $1 282.4. With this second key support broken, the movement to the downside may extend to $1 274.7.

Meanwhile, silver futures for July will see their first resistance level at $19.777. If it is breached, the contract will meet next resistance at $20.033, and then the third level at $20.242.

Silver will find its first support point at $19.312. Should it be breached, the second level of support is estimated at $19.103 and the third at $18.847.