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Gold Down on Lack of Safe-Haven Demand, Higher USDX and Bearish Charts

(Kitco News) - Gold prices ended the U.S. day session low and hit a three-week low Tuesday. The deteriorating Greek debt crisis has so far failed to roil world markets, or support safe-haven gold. A stronger U.S. dollar index on this day and the continued bearish technical posture for gold also had the sellers in firm control Tuesday. August Comex gold was last down $7.00 at $1,171.90 an ounce. September Comex silver was last down $0.06 at $15.635 an ounce. Silver prices closed at a technically very bearish monthly and quarterly low close today.

Tuesday is the last trading day of the month and of the quarter, which makes it an extra important trading day from a technical perspective. It’s technically significant when a market closes at or very near its monthly (or quarterly) high or low for that period.

The Greece government needed to make a more than 1 billion Euro debt payment by the end of today, or be technically in default. That won’t happen. Last-minute scrambling by both Greece and the EU may or may not find a way to once again kick the can down the road on the debt repayment/new bailout money matter. Reports said the Greek prime minister may have a late change of heart and accept an EU deal. Greek banks remain closed and Greece’s prime minister has called for a July 5 referendum on new austerity measures. Greece is now closer than ever to exiting the European monetary system.

European stock markets were lower again Tuesday on the Greece worries. However, U.S. stock indexes were posting rallies Tuesday afternoon and the rest of the world market place is a only bit anxious about what’s happening with Greece--and by no means is the anxiety anything close to panic. Once again, the fickle nature of markets, traders and investors could see today’s relative calm quickly deteriorate into fear by Wednesday or Thursday.

The London P.M. gold fix is $1,171.00 versus the previous A.M. fix of $1,175.00.

Technically, August gold futures prices closed near mid-range and hit a three-week low today. Gold bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,187.60. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the June low of $1,162.10. First resistance is seen at today’s high of $1,180.00 and then at $1,187.60. First support is seen at today’s low of $1,165.40 and then at $1,162.10. Wyckoff’s Market Rating: 2.0

September silver futures prices closed near mid-range and hit another 3.5-month low today. Prices also closed at a very technically bearish monthly and quarterly low close today. Silver bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.26 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $15.38. First resistance is seen at today’s high of $15.84 and then at $16.00. Next support is seen at today’s low of $15.435 and then at $15.38. Wyckoff's Market Rating: 1.5.

September N.Y. copper closed down 180 points at 261.55 cents today. Prices closed near mid-range today. Copper bears have the firm near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 276.90 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of 255.75 cents. First resistance is seen at Monday’s high of 265.50 cents and then at 268.00 cents. First support is seen at 260.00 cents and then at today’s low of 258.90 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

 

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