Resurgent greenback constraining metals markets bulls

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(Kitco News) - Gold and silver prices are down near midday Wednesday. Both markets hit six-week lows early on. A solid rebound in the U.S. dollar index that hit a six-week high today, and is trending higher, is a significantly bearish outside market element working against the metals market bulls at mid-week. June gold was last down $8.70 at $1,984.50 and July silver was down $0.053 at $23.84.

Trader and investor risk appetite keener at mid-week. The U.S. debt-limit extension talks held Tuesday afternoon were upbeat. President Joe Biden and House Speaker Kevin McCarthy named top emissaries to negotiate a deal to avert an unprecedented national default. Biden cut short an upcoming overseas trip in hopes of closing an agreement before a June 1 deadline. In a press conference Wednesday morning, Biden said “we had a productive meeting” on Tuesday. “We are going to come together because there is no alternative.”

Asian and European stock markets were mixed overnight. U.S. stock indexes are higher near midday.

The marketplace continues to monitor comments made this week by Federal Reserve officials. While their opinions have been mixed regarding continuing to tighten U.S. monetary policy or to pause, traders and investors generally view their collective remarks as still leaning slightly hawkish. Such has supported the U.S. dollar index, which in turn has pressured the precious metals.

The key outside markets today see the U.S. dollar index solidly higher and the greenback bulls have momentum. Nymex crude oil prices are higher and trading around $72.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.56%.

Technically, June gold futures prices hit a six-week low today. Bulls still have the overall near-term technical advantage but are fading. A 2.5-month-old uptrend on the daily bar chart has been at least temporarily negated. Bulls' next upside price objective is to produce a close above solid resistance at the record high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at $2,000.00 and then at $2,007.00. First support is seen at today's low of $1,978.10 and then at the April low of $1,965.90. Wyckoff's Market Rating: 6.5

July silver futures prices hit a six-week low again today. The silver bulls and bears are on a level overall near-term technical playing field but the bulls are fading. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April and May 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 $24.00 and then at this week's high of $24.395. Next support is seen at today's low of $23.715 and then at $23.50. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed up 910 points at 375.80 cents today. Prices closed nearer the session high and hit a 5.5-month low early on today. Prices also scored a bullish outside day up today. The copper bears have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at this week's high of 377.90 cents and then at 380.00 cents. First support is seen at 370.00 cents and then at today's low of 365.25 cents. Wyckoff's Market Rating: 3.5.

By

Jim Wyckoff

For Kitco News

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