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Gold Sinks To 5-Week Low As U.S. Dollar Stronger

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(Kitco News) - Gold prices are moderately down and have dropped to a five-week low in early U.S. trading Monday. Silver prices are also weaker and hit a three-week low overnight. The recent solid rally in the U.S. dollar index continues to curtail buying interest in the precious metals markets. June Comex gold futures were last down $9.80 an ounce at $1,313.70. May Comex silver was last down $0.141 at $16.265 an ounce.

Also working against the safe-haven metals are upbeat trader and investor risk attitudes in the world marketplace. It appears North Korea has softened its resolve on its nuclear ambitions, while the U.S. and China are holding high-level trade talks this week, which could avoid a major trade war.

World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Solid corporate earnings reports released recently have supported world stock markets.

Two important meetings will have the attention of the world marketplace this week: the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday, and the above-mentioned U.S. high-level trade delegation that will be in China later this week. And then on Friday is the U.S. employment report from the Labor Department—arguably the most important U.S. data point of the month.

The key “outside markets” on Monday morning see the U.S. dollar index trading firmer. Prices last week hit a 3.5-month high. Meantime, Nymex crude oil prices are lower and trading just above $67.00 a barrel. The U.S. oil rig count hit a three-year high last week, which is pressing oil prices lower today.

U.S. economic data due for release Monday includes personal income and outlays, the ISM Chicago business survey, pending home sales and the Texas manufacturing outlook survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold bulls still have the slight overall near-term technical advantage, but have faded badly recently and need to show fresh power soon to avoid more serious chart damage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,337.60. 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 $1,320.00 and then at today’s high of $1,325.90. First support is seen at today’s low of $1,312.40 and then at $1,309.30. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $16.10. First resistance is seen at today’s high of $16.485 and then at $16.58. Next support is seen at $16.15 and then at $16.10. Wyckoff's Market Rating: 4.0.

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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