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Gold, silver pull back as U.S. stocks, greenback rebound

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(Kitco News) - Gold and silver prices are trading lower in midday U.S. trading Monday, as a rally in the U.S. stock market has, at least on this day, dented buying interest in the precious metals. A solid rally in the U.S. dollar index today and Nymex crude oil prices dropping to an 18-year low of $19.85 a barrel are also negative “outside market” forces working against the metals markets. June gold futures were last down $15.30 an ounce at $1,638.80. May Comex silver prices were last down $0.409 at $14.12 an ounce.

Global stock markets were mostly weaker in overnight trading. Traders and investors are entering another week uncertainty, as the mood of the marketplace has turned from panic to gloom. U.S. President Trump on Sunday extended the shutdown of most U.S. retail businesses and schools by another 30 days, to April 30. The U.S. can expect a best-case scenario of around 100,000 to 200,000 deaths and millions infected with the illness, said the top U.S. health official over the weekend.

In overnight news, China's central bank Monday cut its main short-term lending rate and injected $7 billion into the financial system in the latest action taken by global policymakers to try and support their markets.

As the first quarter comes to an end Tuesday, market watchers are wondering how many companies and individuals hurt by the coronavirus outbreak can pay their bills, including a domino effect occurring on the matter as the global economy seizes up. Also in question are the major credit ratings agencies and how they will deal with the many big companies that are in a serious financial bind. It’s tough to be a buyer of any markets at all in these conditions, and with the ultimate ramifications of the Covid-19 outbreak still so uncertain.

The 10-year U.S. Treasury note yield is trading around 0.64% Monday--well down from last week’s levels and suggesting still-very-nervous bond traders. This suggests there will be some more safe-haven demand for gold in the near term.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls still have the firm overall near-term technical advantage amid still fairly high volatility trading. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,707.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,600.00. First resistance is seen at $1,650.00 and then at $1,660.00. First support is seen at today’s low of $1,635.70 and then at $1,625.00. Wyckoff's Market Rating: 6.5.

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bears have regained the overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $11.64. First resistance is seen at today’s high of $14.71 and then at $15.00. Next support is seen at today’s low of $13.945 and then at $13.50. Wyckoff's Market Rating: 4.0.

May N.Y. copper closed down 140 points at 215.80 cents today. Prices closed near mid-range today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 230.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 197.25 cents. First resistance is seen at 220.00 cents and then at last week’s high of 223.95 cents. First support is seen at today’s low of 213.95 cents and then at 210.00 cents. Wyckoff's Market Rating: 3.0.

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.