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Gold Hits 15-Mo. High Above $1,300; Slumping Dollar Fuels Bulls

(Kitco News) - Gold prices are up again and scored a 15-month high of $1,306.00 in June Nymex futures as of this writing in early U.S. trading Monday. A depreciating U.S. dollar on the world foreign exchange markets is a major bullish element working in the precious metals bulls’ favor. Safe-haven demand amid nervous world stock markets and chart-based buying interest are features helping to propel the gold market. Silver prices also pushed to a 15-month high above $18.00 overnight. June Comex gold was last up $14.70 at $1,305.00 an ounce. July Comex silver was last up $0.196 at $18.015 an ounce.

A weakening U.S. dollar index that fell to an eight-month low overnight has been a bullish element for gold and the rest of the raw commodity sector recently. The rallying precious metals markets are one more clue the raw commodity sector has ended its bust cycle and is or will be embarking on a boom cycle.

Live 24 hours gold chart [Kitco Inc.]

The other “outside market” finds Nymex crude oil prices near steady in early New York trading Monday, but still trading above $45.00 a barrel.

The Japanese yen pushed to a 1.5-year high overnight, which put more selling pressure on the Japanese stock market. Most other Asian stock markets were weaker Monday, on worries about the surging yen and the tanking Japanese stock market. China markets were closed for a holiday Monday.

U.S. stock indexes are pointing toward slightly higher openings when the day session begins in New York.

In other overnight news, the Euro zone manufacturing purchasing managers’ index (PMI) was reported at 57.1 in April from 51.5 in March. A reading above 50.0 suggests expansion in the sector. European stock markets were mostly firmer Monday.

U.S. economic data due for release Monday includes the U.S. manufacturing PMI, construction spending, and the ISM manufacturing report on business.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated 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 solid overall near-term technical advantage and have momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,325.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,250.00. First resistance is seen at the overnight high of $1,306.00 and then at $1,310.00. First support is seen at the overnight low of $1,292.50 and then at $1,287.80. Wyckoff’s Market Rating: 8.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver bulls have the solid overall near-term technical advantage as prices hit a 15-month overnight. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.20. First resistance is at the overnight high of $18.06 and then at $18.25. Next support is seen at the overnight low of $17.75 and then at $17.615. Wyckoff's Market Rating: 8.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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