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Gold bulls claw back most of early daily losses

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(Kitco News) - Gold prices are slightly lower in midday trading but well up from the daily lows as bargain hunters stepped in to buy the dip. The metals saw some routine profit-taking from the shorter-term futures traders after recent good gains pushed the markets to multi-week highs Monday. June gold futures were last down $2.50 at $1,835.20 and July Comex silver was last up $0.143` at $27.635 an ounce.

U.S. stock indexes are solidly lower at midday, led by the technology sector. Some so far just routine profit-taking pressure is seen in the indexes that have been trending higher. Some market analysts are blaming worries about problematic inflation for the pullback in stock markets this week. The U.S. consumer price index is out on Wednesday morning and will be closely scrutinized. Forecasts call for April CPI to be up 0.2% from March and up 3.6%, year-on-year.

While the major economies of the West have not yet been reporting inflation numbers that are concerning, China has just reported its producer prices climbed at the fastest pace in 3.5 years in April, reflecting a big rise in input costs. Producer prices rose 6.8%, year-on-year in April, up from 4.4% in March. China’s consumer price index increased 0.9% year-on-year in April, with demand continuing to improve compared to a 0.4% reading recorded in March. Meantime, China’s central bank raised the yuan currency fix against the U.S. dollar to 6.4254, giving some relief to importers of commodities. Around 100 steel mills in China have raised their prices, reflecting strong demand and rising iron ore prices. The rise in steel prices may threaten a range of downstream industries.

Remember that history shows hard assets like the metals tend to see their prices perform better during times of rising inflationary pressures.

The key outside markets today see the U.S. dollar index weaker and hitting another 2.5-month low. Meantime, Nymex crude oil prices are slightly up and trading around $65.00 a barrel. The U.S. Colonial pipeline system that has been shut down due to a cyberattack is set to reopen temporarily. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.606%.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have the firm overall near-term technical advantage. A six-week-old price uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,881.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at this week’s high of $1,846.30 and then at $1,850.00. First support is seen at today’s low of $1,817.80 and then at $1,810.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures were near the session high. Prices were poised to close at a 2.5-month high close today. The silver bulls have the overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.475 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.745. First resistance is seen at this week’s high of $28.005 and then at $28.25. Next support is seen at today’s low of $27.18 and then at $27.00. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed up 410 points at 475.85 cents today. Prices closed nearer the session high today and closed at a contract and nearly 10-year high close today. The copper bulls have the strong overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 500.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 442.00 cents. First resistance is seen at today’s high of 480.05 cents and then at the contract high of 488.80 cents. First support is seen at today’s low of 466.25 and then at 460.00 cents. Wyckoff's Market Rating: 9.0.

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.