Gold sharply down as risk aversion ebbs a bit
(Kitco News) - Gold prices are trading sharply lower in midday U.S. trading Tuesday, as trader and investor risk sentiment has increased a bit this week. That’s bearish for the safe-haven metal. June gold futures were last down $31.50 an ounce at $1,611.40.May Comex silver prices were last up $0.108 at $14.24 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 were weaker at midday. 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, which also buoyed investor confidence. The second-largest economy’s 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 slightly higher and trading around $20.25 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 0.66% Tuesday—up a bit from Monday.
Technically, June gold futures bulls still have the overall near-term technical advantage but are fading this week and need to show fresh power soon. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,650.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,600.00. First resistance is seen at $1,625.00 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 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 Monday’s high of $14.71 and then at $15.00. Next support is seen at Monday’s low of $13.945 and then at $13.50. Wyckoff's Market Rating: 4.0.
May N.Y. copper closed up 710 points at 222.75 cents today. Prices closed nearer the session high and hit a two-week high today. The copper bears still have the overall near-term technical advantage. However, more good gains this week would suggest a market bottom is in place. 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 today’s high of 224.80 cents and then at 227.50 cents. First support is seen at today’s low of 216.55 cents and then at this week’s low of 213.95 cents. Wyckoff's Market Rating: 3.5.