Price declines for gold, silver as USDX continues climb
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(Kitco News) - Gold and silver prices are solidly lower in early U.S. trading Tuesday, with silver notching a seven-week low. An appreciating U.S. dollar on the foreign exchange market and rising U.S. Treasury yields have the gold and silver market bulls running for cover. Chart-based selling is also featured today as the near-term technical postures for both metals have deteriorated recently. June gold was last down $17.50 at $1,959.70 and July silver was down $0.576 at $23.28.
Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Reports said President Biden and House Speaker McCarthy on Monday afternoon had productive talks on the U.S. debt-ceiling extension. Both are scheduled to meet again this week on the matter. U.S. Treasury Secretary Janet Yellen has reiterated that the U.S. government could run out of money by June 1 if no new debt-extension deal is reached.
The apparent progress on the U.S. debt talks may be prompting some added selling pressure on the safe-haven gold and silver markets. Also, Federal Reserve officials’ recent comments have been generally still leaning more hawkish than dovish on U.S. monetary policy, which is another bearish element for the metals.
In overnight news, the Euro zone May composite purchasing managers index (PMI) came in at 53.3, which was slightly less than expectations. The April reading was 54.1. A number above 50.0 suggests growth in the sector.
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The key outside markets today see the U.S. dollar index higher and hitting a two-month high overnight. Nymex crude oil prices are slightly up and trading around $72.20 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.72%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, the U.S. flash manufacturing and services purchasing managers’ indexes, the Richmond Fed business survey, and new residential sales.
Technically, the gold futures bulls have the overall near-term technical advantage but have faded recently. Prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the May high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,974.40 and then at this week’s high of $1,984.80. First support is seen at last week’s low of $1,954.40 and then at $1,950.00. Wyckoff's Market Rating: 6.0
The silver bears have the overall near-term technical advantage. Prices are trending lower on the daily chart. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $24.50. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at today’s high of $23.81 and then at $24.00. Next support is seen at $23.00 and then at $22.50. Wyckoff's Market Rating: 4.0.