Gold down as raw commodity sector shudders amid crude oil collapse
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(Kitco News) - Gold and silver futures prices are trading lower in midday U.S. trading Tuesday, but up from their two-week lows scored earlier in the day. The unprecedented total collapse in crude oil futures prices early this week has buyers in most commodity markets, including the metals, scrambling for cover. June gold futures were last down $20.10 an ounce at $1,691.00. May Comex silver prices were last down $0.694 at $14.92 an ounce.
The question for gold traders is how long their metal will follow raw commodity sector leader crude oil before shifting back into its status as a safe-haven asset. Recently it seems one day gold leans one way and the next it leans another. Still, the gold bulls possess the firm overall technical advantage on the charts, suggesting more upside price action, but mixed with some backing and filling.
Global stock markets were mostly lower in overnight trading. U.S. stock indexes are solidly lower at midday. This is a busy week for U.S. corporate earnings, which are reminding traders and investors of debilitating effects of the Covid-19 pandemic, even as some parts of the North American economy may be set to reopen soon.
The important outside markets today see June Nymex crude oil futures down $8.70, or 45%, at $11.85. The U.S. dollar index higher today on safe-haven demand. The 10-year U.S. Treasury note yield is trading around 0.57% today—well down from levels seen recently and a sign of “flight to quality” amid higher anxiety in the marketplace at present.
Technically, June gold futures bulls still have the firm overall near-term technical advantage but need to show fresh power soon to keep alive a price uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,650.00. First resistance is seen at this week’s high of $1718.40 and then at $1,725.00. First support is seen at $1,675.00 and then at today’s low of $1,666.20. Wyckoff's Market Rating: 7.0
May silver futures bulls have the slight overall near-term technical advantage. However, a four-week-old uptrend on the daily bar chart is in serious jeopardy. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $16.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at today’s high of $15.56 and then at this week’s high of $16.69. Next support is seen at today’s low of $14.56 and then at $14.25. Wyckoff's Market Rating: 5.5.
May N.Y. copper closed down 870 points at 223.30 cents today. Prices closed near mid-range and hit a three-week low today. The copper bears have gained the overall near-term technical advantage. A four-week-old price uptrend on the daily bar chart has been soundly negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 235.80 cents. The next downside price objective for the bears is closing prices below solid technical support at 210.00 cents. First resistance is seen at 225.00 cents and then at 230.00 cents. First support is seen at 220.00 cents and then at today’s low of 214.95 cents. Wyckoff's Market Rating: 4.0.