Gold Sharply Lower Amid Big "Risk-On" Trading Day
(Kitco News) - Gold prices are solidly lower in early U.S. trading Monday, as the safe-haven asset is getting hit hard by rallying risk assets that include world stock markets and the Euro currency. June Comex gold was last down $19.10 an ounce at $1,270.00. May Comex silver was last down $0.091 at $17.765 an ounce.
The first round of the French presidential elections that were be held Sunday showed the nationalist candidate Marine LePen garnering less support than expected and dealing the so-called Euroskeptics another blow. LePen will be in the run-off election on May 7, but so will the centrist candidate, Emmanuel Macron. Macron is projected by early polls to be the winner of the May 7 vote. European market watchers had been very nervous as the French elections approached and polls showed tight races. A few weeks ago the Dutch elections showed the nationalist candidate go down in defeat.
Safe-haven assets gold, U.S. Treasuries and U.S. dollar index prices all have dropped sharply Monday, while the world stock markets are mostly in a rally mode. The Euro currency pushed to a five-month high on the French election results.
The other key outside market on Monday morning sees Nymex crude oil prices modestly higher on a corrective bounce after recent selling pressure.
If world stock markets continue their rallies this week, look for the gold market to continue to suffer losses. However, there are still geopolitical tensions that could quickly halt the selling interest in gold and push the yellow metal’s price north. The U.S.-North Korea stare-down and U.S.-Russia relations are still very much pressure points in the world marketplace.
U.S. economic data due for release Monday includes the Chicago Fed national activity index and the Texas manufacturing outlook survey.
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Technically, June gold futures bulls still have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,260.00. First resistance is seen at $1,275.00 and then at today’s high of $1,280.00. First support is seen at today’s low of $1,266.00 and then at $1,260.00. Wyckoff’s Market Rating: 6.0
May silver bulls have the slight overall near-term technical advantage but have faded and need to show fresh power soon. Prices hit a four-week low today. The next upside price breakout objective is closing futures prices above solid technical resistance at the April high of $18.655 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 $17.895 and then at $18.00. Next support is seen at today’s low of $17.55 and then at $17.25. Wyckoff's Market Rating: 5.5.