Gold Weaker Amid Better World Risk Appetite
Monday April 04, 2016 08:28
(Kitco News) - Gold prices are modestly lower in early U.S. trading Monday, amid an improving general world trader/investor risk appetite. June Comex gold was last down $2.20 at $1,221.30 an ounce. May Comex silver was last down $0.016 at $15.03 an ounce.
Global stocks were mixed in quieter overnight trading. Chinese markets were closed for a holiday. U.S. stock indexes are pointed toward slightly higher openings when the day session begins in New York.
In overnight news, the Euro zone unemployment rate was reported at 10.3% in February from 10.4% in January. The regions producer price index was down 0.7% in February, month-on-month, and down 4.2%, year-on-year. The drop in the PPI was the largest in over six years, and underscores the very difficult battle the European Central Bank is waging to combat price deflation.
The key “outside markets” on Monday find the U.S. dollar index slightly higher, in the aftermath of an upbeat U.S. employment report released last Friday. Still, the greenback hit a seven-month low late last week, and dollar index prices are in a near-term downtrend. Meantime, Nymex crude oil prices are slightly lower and hit a four-week low overnight. There are growing notions that a major oil-producers’ meeting in mid-April will not produce a production-constraint agreement. Russia, Saudi Arabia, Iran and other smaller oil producers are scheduled to hold a meeting on April 17.
U.S. economic data due for release Monday includes the ISM New York report on business, manufacturers’ shipments and inventories, and the employment trends index.
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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated so far today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, June gold futures bulls have the overall near-term technical advantage but are fading as prices are in a three-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 $1,250.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at $1,226.00 and then at Friday’s high of $1,237.20. First support is seen at last week’s low of $1,210.30 and then at the March low of $1,207.70. Wyckoff’s Market Rating: 6.0
May silver bears have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at last week’s high of $15.55 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.61. First resistance is at $15.20 and then at $15.55. Next support is seen at last week’s low of $14.785 and then at $14.61. Wyckoff's Market Rating: 4.0.