Strong Dollar Stymies Gold, Silver Bulls
(Kitco News) - Gold and silver prices were moderately down in early afternoon trading Monday. However, both markets were well up from their daily lows to begin to suggest the bears are now exhausted from their recent downside assault. Early on today gold sank to a two-month low and silver dropped to a five-week bottom. 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 $4.40 an ounce at $1,319.00. July Comex silver was last down $0.097 at $16.40 an ounce.
Gold and silver worked farther off their daily lows and crude oil rallied at midday when Israeli President Netanyahu outlined a detailed presentation that Iran is cheating on its nuclear weapons deal with the West. This will make it easier for President Trump to pull out of the deal when it comes up for renewal this month. Such would also be potentially destabilizing to the Middle East.
June gold futures prices Monday morning dipped below the technically important 200-day moving average for the first time since late-December, but then popped right back above it. This is one encouraging sign the recent selling pressure in the gold market could be ending. However, it will be important for June gold prices to hold above the 200-day moving average early this week. If such is the case, it would be one clue a near-term market bottom is in place.
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 see the U.S. dollar index trading firmer. Prices last week hit a 3.5-month high. Meantime, Nymex crude oil prices are higher and trading above $68.00 a barrel. The U.S. oil rig count hit a three-year high last week, which could limit the upside in crude oil prices this week.
Technically, the gold bulls still have the slight overall near-term technical advantage but are fading and need to show fresh power soon to avoid more serious near-term 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 today’s high of $1,325.90 and then at $1,330.00. First support is seen at $1,309.00 and then at $1,300.00. Wyckoff's Market Rating: 5.5
The silver 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 $16.185. First resistance is seen at today’s high of $16.58 and then at $16.75. Next support is seen at today’s low of $16.225 and then at $16.185. Wyckoff's Market Rating: 3.0.
July N.Y. copper closed down 25 points at 307.20 cents today. Prices closed near mid-range. The copper bulls and bears are on a level overall near-term technical playing field. A four-week-old uptrend on the daily bar chart has been negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 321.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 295.85 cents. First resistance is seen at today’s high of 308.90 cents and then at 310.00 cents. First support is last week’s low of 305.20 cents and then at 302.50 cents. Wyckoff's Market Rating: 5.0.