Gold, Silver Prices Lower As Greenback Rallies
(Kitco News) - Gold and silver prices are moderately lower in early U.S. trading Monday, pressured in part by an appreciating U.S. dollar on the world foreign exchange market. There is also little risk aversion in the marketplace at present, which is a negative for the safe-haven metals. June Comex gold futures were last down $8.30 an ounce at $1,329.90. May Comex silver was last down $0.208 at $16.955 an ounce.
World stock markets were mostly lower overnight, on profit taking from recent gains. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
U.S. Treasury bond yields are on the rise again early this week, with the yield on the 10-year note nearing 3%, which is a four-year high. Some argue that rising bond yields pull investor demand away from gold, as gold produces no dividends or interest income. However, rising bond yields
also suggest rising inflationary pressures. Problematic inflation is a bullish element for hard assets like the metals. Still, present worldwide inflation levels are not (yet) deemed problematic.
The key “outside markets” on Monday morning see the U.S. dollar index trading higher and hitting a more-than-three-month high. Nymex crude oil prices are weaker and trading just above $68.00 a barrel. Oil prices last week hit a 3.5-year high.
U.S. economic data due for release Monday includes the Chicago Fed national activity index, the U.S. flash services and manufacturing PMIs, and existing home sales.
Technically, June gold bulls still have the overall near-term technical advantage, but are fading a bit. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,375.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,309.30. First resistance is seen at the overnight high of $1,337.60 and then at $1,345.00. First support is seen at $1,325.00 and then at the April low of $1,322.60. Wyckoff's Market Rating: 6.0
May silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the January high of $17.785 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at the overnight high of $17.135 and then at $17.25. Next support is seen at $16.75 and then at last week’s low of $16.545. Wyckoff's Market Rating: 6.0.