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Gold trades both sides of unchanged in choppy action Tuesday

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(Kitco News) -  Gold prices are trading modestly down in midday U.S. trading Tuesday, but it’s been an up-and-down, choppy session. More chart consolidation and some profit taking by the shorter-term futures traders are featured early this week. The gold market bulls are still encouraged by their metal’s stability amid recent rallies in global stock markets. This week’s drop in crude oil prices has somewhat curtailed demand for the precious metals, as oil is arguably the leader of the raw commodity sector. June gold futures were last down $3.60 an ounce at $1,720.10. May Comex silver prices were last down $0.10 at $15.11 an ounce.

Global stock markets were mixed in overnight trading, while the U.S. stock indexes are near steady at midday and have lost solid gains seen earlier today. Stock indexes earlier today were
at or near seven-week highs. Some regions in some countries, including the U.S., are reopening at least some businesses that have been shuttered from the Covid-19-induced lockdown. People around the globe are starting to suffer from what is being called “quarantine fatigue,” which means many are starting to ignore social-distancing guidelines and are eager to see economies reopen—while government leaders debate the timing of reopening commerce. Reports say U.S. automakers plan on restarting their plants on May 18.

Some better risk appetite in the world marketplace recently, as evidenced by rallying stock markets, is a negative for safe-haven gold and silver. The U.S. dollar index also moved well up from its daily low by midday today, which also somewhat squelched buying interest in the metals. The U.S. dollar index modestly lower at present. The greenback bulls are fading this week, partly on notions other major countries’ economies are coming back to life faster than that of the U.S. The 10-year U.S. Treasury note yield is trading around 0.61%.

A feature in the marketplace early this week is another big drop in crude oil prices, with Nymex crude presently trading around $12.00 a barrel. There is growing talk that Nymex crude prices will again fall into negative territory when the June contract nears expiration in late May. There is no place to store oil amid a glutted world market that has seen a historic demand shock. OPEC will begin its previously announced oil-production cuts later this week but that has had no positive impact on oil prices.

Key central bank meetings occur this week, including those of the Federal Reserve (FOMC) and the European Central Bank. The FOMC meeting began today and ends Wednesday afternoon with a statement. The Fed over the past few weeks has aggressively flooded the U.S. financial system with liquidity. Market watchers will be keen to see what the FOMC statement says, including any new monetary policy moves. Key U.S. corporate earnings reports are also due out this week.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls still have the firm overall near-term technical advantage. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing prices below solid technical support at last week’s low of $1,666.20. First resistance is seen at today’s high of $1731.90 and then at this week’s high of $1,745.80. First support is seen at today’s low of $1,704.10 and then at 1,700.00. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls have the slight overall near-term technical advantage. However, a four-week-old uptrend on the daily bar chart is still in 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 this week’s high of $15.445 and then at last week’s high of $15.72. Next support is seen at today’s low of $14.94 and then at $14.75. Wyckoff's Market Rating: 5.5.

May N.Y. copper closed up 5 points at 235.05 cents today. Prices closed near mid-range today. The copper bears have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 250.00 cents. The next downside price objective for the bears is closing prices below solid technical support at last week’s low of 214.95 cents. First resistance is seen at this week’s high of 238.55 cents and then at 240.00 cents. First support is seen at this week’s low of 231.65 cents and then at 230.00 cents. Wyckoff's Market Rating: 6.0.

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.