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Gold Sinks To 6-Week Low On Strong U.S. Dollar, Chart Selling

Kitco News

(Kitco News) - Gold prices were trading down and hit a six-week low in early afternoon U.S. trading Tuesday. A strong U.S. dollar index and a deteriorating near-term technical posture are working against the gold market bulls. Silver market bulls are also fading following recent solid selling pressure and fresh chart damage inflicted. April Comex gold was last down $7.40 an ounce at $1,218.10. May Comex silver was last down $0.223 at $17.55 an ounce.

The generally upbeat trader and investor risk appetite in recent weeks—evidenced by rallying world stock markets that have hit record or multi-year highs—has also been a major negative for the safe-haven gold market.

Growing ideas the U.S. Federal Reserve will raise interest rates at its FOMC meeting next week are also a negative for the precious metals and other raw commodity markets. However, the specter of a U.S. rate hike next week has now virtually been priced into most markets.

The key outside markets on Tuesday saw the U.S. dollar index trading slightly higher. The dollar index is in a price uptrend and has benefitted recently on increasing ideas of a U.S. interest rate hike coming next week. Meantime, Nymex crude oil futures prices were slightly lower at midday. Crude prices are still trapped in a sideways and choppy trading range that has been in place for several weeks.

The markets have been quieter this week ahead of what is arguably the most important economic report of the week and even of the month on Friday--the U.S. employment report for February from the Labor Department. The key non-farm payrolls component of the report is forecast to come in at up around 190,000 workers.

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

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bulls and bears are now back on a level overall near-term technical playing field but the bears have momentum on their side. Gold 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 pushing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,227.40 and then at this week’s high of $1,237.30. First support is seen at today’s low of $1,215.80 and then at $1,210.00. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures prices were nearer the session low at midday and hit a four-week low. The silver market bulls and bears are back on a level overall near-term technical playing field but the bears have momentum on their side. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the February high of $18.54 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $17.82 and then at $18.00. Next support is seen at today’s low of $17.495 and then at $17.25. Wyckoff's Market Rating: 5.0.

May N.Y. copper closed down 365 points at 261.55 cents today. Prices closed nearer the session low and hit a six-week low today. The copper bulls still have the slight overall near-term technical advantage, but are fading. Prices are in a three-week-old downtrend. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at last week’s high of 276.85 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at today’s high of 266.40 cents and then at 270.00 cents. First support is seen at today’s low of 260.80 and then at 259.00 cents. Wyckoff's Market Rating: 5.5.

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.