Gold, Silver Feel Pressure From Strong U.S. Dollar
(Kitco News) - Gold and silver prices are weaker in early U.S. trading Monday. A higher U.S. dollar index that scored another four-month high overnight continues to cast a bearish shadow over the precious metals markets. June Comex gold futures were last down $3.20 an ounce at $1,311.40. July Comex silver was last down $0.079 at $16.44 an ounce.
World stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins. A lack of risk aversion in the world marketplace is also a bearish element for the safe-haven gold and silver markets.
The other “outside market” today finds crude oil prices higher and hitting a 3.5-year high overnight. Brent crude is approaching $76.00 a barrel and Nymex crude oil futures are above $70.00 a barrel. There is growing concern the U.S. will not renew a deal struck with Iran in 2015 to curtail its nuclear arms development. The agreement expires Saturday. If the U.S. pulls out of the agreement, sanctions against Iran will be reapplied, including ostensibly sharply curbing Iranian oil exports. The rallying crude oil market is limiting the downside pressure on the precious metals market. Crude oil is the leader of the raw commodity sector and its “rising tide” is tending to “lift all boats,” to varying degrees—even if it means limiting the downside price pressures on some commodity markets.
U.S. economic data due for release Monday is light and includes the employment trends index and consumer credit.
Technically, June gold bulls and bears are on a level overall near-term technical playing field. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,338.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at the overnight high of $1,320.10 and then at $1,325.00. First support is seen at the May low of $1,302.30 and then at $1,300.00. Wyckoff's Market Rating: 5.0
July silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at last week’s high of $16.62 and then at $16.75. Next support is seen at $16.25 and then at the May low of $16.07. Wyckoff's Market Rating: 3.5.