(Kitco News) - Gold prices are sharply down in early U.S. trading, on strong profit-taking pressure from the shorter-term traders after prices spiked to a record high of $3,509.90, basis June Comex futures, on Tuesday. A return of risk appetite to the general marketplace at mid-week is also bearish for the safe-haven metals. The gold bulls appear to be fully exhausted at present, suggesting a near-term market top is in place. June gold was last down $90.70 at $3,328.70. May silver prices were last down $0.12 at $32.785.
Asian and European stock markets were higher in overnight trading. U.S. stock indexes are pointed to sharply higher openings today in New York, following Tuesday’s solid gains. Risk appetite has indeed returned to the general marketplace at mid-week. President Trump said Tuesday he has “no intention” of firing Federal Reserve Chair Jerome Powell, despite Trump’s recent public attacks. Speaking in the Oval Office, Trump said, “Never did,” when asked about Powell’s job security and possibly firing Powell. Trump continues to push for aggressive U.S. rate cuts, saying, “This is a perfect time to lower interest rates,” and expressing frustration that Powell has not acted swiftly. Still, he acknowledged Powell’s legal protection.
Separately, Trump appeared to soften his stance in his trade war with China, saying U.S.-imposed tariffs of 145% on imported goods from China will come down “substantially” after the two sides negotiate a deal. The tariff levels “won’t be anywhere near that high,” Trump said, answering questions in the Oval Office. “It will come down substantially, but it won’t be zero.” Trump said in the Oval Office that “we’re doing fine with China,” and suggested the U.S. won’t play hardball or raise the issue of Covid-19. “We’re going to be very nice,” he said. “Ultimately they have to make a deal.”
The key outside markets are bearish for metals today and see the U.S. dollar index firmer on a rebound after hitting a three-year low Monday. Nymex crude oil futures prices are weaker and trading around $63.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.305%, down a bit from earlier this week.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. flash services and manufacturing purchasing managers indexes, new residential sales and the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.
Technically, June gold futures bulls have the solid overall near-term technical advantage but are fading and appear exhausted. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,509.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at $3,350.00 and then at the overnight high of $3,396.00. First support is seen at the overnight low of $3,302.60 and then at $3,300.00. Wyckoff's Market Rating: 7.5.
May silver futures bulls have the firm overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $34.00. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at last week’s high of $33.175 and then at $33.50. Next support is seen at the overnight low of $32.05 and then at $31.50. Wyckoff's Market Rating: 6.5.
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