Gold prices sharply down as risk appetite upticks
(Kitco News) - Gold prices are trading sharply lower in early U.S. trading Tuesday, as trader and investor risk sentiment has increased a bit early this week. That’s bearish for the safe-haven metal. June gold futures were last down $29.60 an ounce at $1,613.30. May Comex silver prices were last up $0.003 at $14.135 an ounce.
On this technically important last trading day of the month and of the quarter, global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Traders and investors are a bit more upbeat early this week following news Monday morning that a vaccine for Covid-19 is on a fast track and could be ready for the public by early 2021. Still, most global stock indexes will experience their worst quarter since 2008.
In overnight news, China got some positive economic data Tuesday, as the manufacturing purchasing managers index (PMI) for March was 52.0 from 35.7 in February, while the services PMI was 52.3 in March versus 29.6 in February. A reading above 50.0 suggests growth in the sector. This news was uplifting to those economies hit hard by the coronavirus, as China’s economy has been able to stage a very swift recovery.
The important outside markets today see Nymex crude oil prices higher and trading around $21.25 a barrel after hitting an 18-year low of $19.27 a barrel Monday. There are anecdotal reports that U.S. crude oil trading on some local cash markets is selling for as little as $5.00 a barrel due to a supply glut and no place to store oil in the U.S. The U.S. dollar index is rebounding early this week after last week’s strong losses. The 10-year U.S. Treasury note yield is trading around 0.68% Tuesday morning—up a bit from Monday. Gold prices are sharply lower so far this week, amid the uptick in trader/investor risk appetite and the stronger U.S. dollar.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P Case-Shiller home price index, the consumer confidence index, and the ISM-Chicago business survey.
Technically, the gold bulls still have the overall near-term technical advantage but they are fading early this week and need to show fresh power soon. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,660.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at $1,625.00 and then at today’s high of $1,645.60. First support is seen at today’s low of $1,605.30 and then at $1,600.00. Wyckoff's Market Rating: 6.0.
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 $15.00 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 Monday’s high of $14.71 and then at $15.00. Next support is seen at Monday’ low of $13.945 and then at $13.50. Wyckoff's Market Rating: 5.0.