The precious metals market is attempting to muster a recovery, but as long as the dollar remains strong, we can expect to see only a few sporadic attempts.
All eyes are now on the greenback as the market awaits the release of the June jobs report, and the first signs look encouraging. Thus, the number of ADP private payrolls rose more than forecasted in June, and now the focus is shifting to Friday’s headline NFPs number. While there is no direct correlation between the ADP numbers and tomorrow's report, an overall impression of market sentiment can still be gauged, and it is definitely positive. The stronger the employment market, the faster the Fed will change its script and comments to a more aggressive narrative in terms of rates and stimulus. This is a boon for the dollar – which has been pricing in such expectations – and a burden for gold and silver.
However, there is no news yet and precious metals are making attempts to stabilize after the previous pullback. Gold entered the range of $1,750-1,790 and is still hovering within this price band. A break above the upper bound of this range will be no easy matter without some kind of external impulse. Silver looks more promising as the comeback looks set to break out of the short-term range of $25.58-26.55, and if the bulls have the stamina to consolidate above $26.55 today, the new upside target will be $27.00.