(Kitco News) - Gold and silver prices are solidly down and have dropped to 4.5-month lows in early-afternoon U.S. trading Tuesday. Gold is struggling to hold above the very important $1,300.00 price level. The recent solid rally in the U.S. dollar index, which hit a four-month high today, continues to squelch buyer interest in the precious metals markets. Chart-based selling has also kicked in for gold and silver recently, as their near-term technical postures have deteriorated. June Comex gold futures were last down $11.90 an ounce at $1,307.20. July Comex silver was last down $0.256 at $16.145 an ounce.

June gold futures for the second day in a row dropped below the important 200-day moving average on the daily chart, which has further emboldening the bears and is inviting more technical selling interest. Gold prices spent just over two weeks trading below the 200-day MA in December.

Two important meetings have the attention of the marketplace this week: The Federal Reserve’s Open Market Committee (FOMC) meeting began Tuesday morning and ends Wednesday afternoon with a statement. Also, a U.S. high-level trade delegation will travel to China later this week to try to avert a trade war between the world’s two largest economies. President Trump late Monday decided to delay by one month implementing on the European Union proposed tariffs on aluminum and steel. Tariffs are in effect for Russia and China.

On Friday is the U.S. employment report from the Labor Department—arguably the most important U.S. data point of the month.

Nymex crude oil prices are weaker and trading just below $68.00 a barrel. The U.S. oil rig count hit a three-year high last week and the IEA on Monday reported that U.S. crude oil production topped 10 million barrels a day in February—a record. These factors will limit buying interest in oil this week.

Technically, the gold bulls have lost their slight overall near-term technical advantage. A close below major psychological support at $1,300.00 would open the door to a larger leg down in prices in the near term. 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 $1,300.00. First resistance is seen at today’s high of $1,317.40 and then at this week’s high of $1,325.90. First support is seen at $1,300.00 and then at $1,290.00. Wyckoff's Market Rating: 5.0

The silver bears have the firm 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 December low of $15.805. First resistance is seen at $16.25 and then at today’s high of $16.37. Next support is seen at today’s low of $16.15 and then at $16.00. Wyckoff's Market Rating: 2.5.

July N.Y. copper closed down 345 points at 303.95 cents today. Prices closed nearer the session low and hit a three-week low today. The copper bulls and bears are on a level overall near-term technical playing field. 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 308.50 cents and then at 310.00 cents. First support is today’s low of 301.95 cents and then at 300.00 cents. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff

For Kitco News

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