Gold prices are solidly up in midday U.S. trading Thursday, supported by a drop in the U.S. dollar index on this day. The near-term chart postures are improving for both metals, and that’s also inviting more technically oriented traders to the long sides. August gold futures were last up $24.7 at $1,873.5.

Today’s employment data report for May will be release at 8:30 pm. That report is a precursor to Friday U.S. employment situation report for May, which is expected to show the key non-farm jobs number at up 325K, after a rise of 428K reported in April. The U.S. unemployment rate is expected to be 3.5% versus 3.6% reported in April. This data is always high on investors’ radars.

Any weakness in the data could weaken the Federal Reserve’s hawkish position, allowing gold prices to rise. As market investors worry about the economic consequences of the Fed’s excessive rate hikes, gold is catching the safe-haven bid this week. Investor concerns that the Fed will not ease up on its rate-hiking campaign anytime soon are kick starting safe-haven flows. Wage pressures in the United States are not subsiding, which should maintain inflationary pressures high for a few months longer.

Furthermore, the escalation in Ukraine may result in increased safe-haven flows into gold. The battle in Ukraine may escalate now that the US has suggested that it will provide advanced rocket systems to Ukraine.

Technically, gold prices were poised to close at a four-week high close. A downtrend on the daily bar chart has at least temporarily been negated. Bears still have the overall near-term technical advantage but the bulls have gained momentum. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900 Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800. First resistance is seen at $1,882 and then at $1,900. First support is seen at $1,850 and then at this week’s low of $1,830.

Analyzed by: Mr. Chhea Chhayheng, Independent Analyst