Gold, Silver Sink As U.S. Dollar Resumes Rally
(Kitco News) - Gold and silver prices are lower in early-afternoon U.S. trading Wednesday. Gold dropped to a four-week low today. The precious metals were pressured in part by a resumption of the appreciation of the U.S. dollar on the foreign exchange market. The U.S. dollar index hit a 3.5-month high today. The USDX has also seen a bullish upside technical breakout on the daily chart, to suggest more gains in the near term. Such could be a significantly bearish weight on the metals in the coming weeks. The safe-haven metal bulls need a big dose of geopolitical uncertainty to jumpstart price rallies. June Comex gold futures were last down $9.30 an ounce at $1,323.80. May Comex silver was last down $0.183 at $16.52 an ounce.
World stock markets were mostly lower overnight. U.S. stock indexes are weaker in afternoon New York dealings. Investor risk appetite has waned a bit at mid-week on some disappointing corporate earnings reports and worries about rising interest rates and inflation. If the U.S. stock market sells off sharply in the near term, look for gold to see safe-haven demand surface.
A feature in the marketplace recently has been rising world government bond yields. The U.S. Treasury 10-year note yield on Tuesday moved above 3.0%--the highest level in four years. U.S. bond yields rose further Wednesday.
The other key “outside markets” on Wednesday sees Nymex crude oil prices near steady and trading just below $68.00 a barrel. The oil market has been supported recently by stronger world economic growth and on some notions that the U.S. could pull out of a deal struck with Iran regarding its nuclear ambitions. If the U.S. slaps sanctions on Iran again, that would reduce Iran’s capacity to sell oil on the world market.
Technically, gold bulls still have the overall near-term technical advantage but are fading and need to show fresh power soon to avoid more serious near-term chart damage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,309.30. First resistance is seen at today’s high of $1,333.80 and then at this week’s high of $1,337.60. First support is seen at today’s low of $1,320.20 and then at $1,312.40. Wyckoff's Market Rating: 6.0
The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the April high of $17.36 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $16.10. First resistance is seen at today’s high of $16.71 and then at $16.89. Next support is seen at today’s low of $16.475 and then at $16.25. Wyckoff's Market Rating: 5.0.
May N.Y. copper closed down 85 points at 313.35 cents today. Prices closed near mid-range. The copper bulls have the overall near-term technical advantage. A four-week-old uptrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 320.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at this week’s high of 311.75 cents and then at the April high of 319.55 cents. First support is today’s low of seen at 311.65 cents and then at 310.00 cents. Wyckoff's Market Rating: 6.0.