Gold, silver back off after better-than-expected U.S. manufacturing reports
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(Kitco News) - Gold prices are moderately lower and silver has lost all the big early price gains in midday U.S. trading Monday. Some upbeat U.S. economic data and positive remarks from the head of the largest U.S. bank worked to pressure the two precious metals markets. June gold was last down $8.10 at $1,990.90 and July silver was down $0.006 at $25.25.
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The gold and silver markets saw selling pressure develop at mid-morning, right after the U.S. ISM April manufacturing purchasing managers index (PMI) and U.S. construction spending reports came in better than market expectations. Also, JP Morgan chief Jamie Dimon said in a conference call after JP Morgan took over the failed First Republic Bank that the U.S. banking sector is now very healthy. Earlier, some safe-haven demand in gold and silver was seen following the weekend news the FDIC shut First Republic in the second-largest U.S. bank failure ever.
On tap this week is the Federal Reserve's Open Market Committee (FOMC) meeting that begins Tuesday and ends Wednesday afternoon. Gold and silver traders today reckoned fresh on the FOMC members' minds will be today's better U.S. manufacturing data, which favors the monetary policy hawks. The FOMC is expected to raise the key U.S. interest rate by 0.25%. The European Central Bank also meets Thursday. The ECB is also expected to raise its main interest rate by a quarter-point. Also, on Friday comes the U.S. employment situation report from the Labor Department. Corporate earnings reports continue to flow out this week, including Apple's results.
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Global stock markets were mostly higher overnight. Some European markets were closed for a holiday. U.S. stock indexes are mixed at midday. The U.S. stock index bulls had a good week last week, including the S&P 500 and Nasdaq indexes on Friday closing at technically bullish weekly and monthly high closes.
The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are lower and trading around $75.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.551% and up today. These three markets were daily bearish elements for the gold and silver markets.
Technically, June gold futures bulls have the firm overall near-term technical advantage. However, a price uptrend on the daily bar chart has been negated. Bulls' next upside price objective is to produce a close above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at $2,000.00 and then at today's high of $2,015.40. First support is seen at $1,980.90 and then at $1,965.90. Wyckoff's Market Rating: 7.0
July silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April high of $26.435. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.80 and then at $26.00. Next support is seen at $25.00 and then at last week's low of $24.735. Wyckoff's Market Rating: 7.0.
July N.Y. copper closed up 495 points at 394.00 cents today. Prices closed near mid-range. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 418.65 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 372.45 cents. First resistance is seen at today's high of 400.50 cents and then at 405.00 cents. First support is seen at today's low of 387.05 cents and then at the April low of 381.65 cents. Wyckoff's Market Rating: 5.0.