(Kitco News) - Gold and silver prices are trading sharply lower in early U.S. trading Tuesday, pressured by a higher U.S. dollar index and an uptick in U.S. Treasury yields today. A deteriorating near-term technical posture for both precious metals is also inviting the chart-based, short-term speculators to the short sides of the futures markets. June gold was last down $106.00 at $4,585.00. May silver prices were down $2.91 at $72.13.
Latest on the war in the Middle East…
--Trump not happy with Iran’s latest peace proposals
--Iranian oil tankers are clustering just shy of U.S. blockade line
--First LNG shipment since war began appears to exit Hormuz
President Trump convened his national security team to discuss Iran’s proposal to end a war now entering its third month. Trump will address the matter “very soon,” White House Press Secretary Karoline Leavitt told reporters on Monday. “His red lines with respect to Iran have been made very, very clear,” she said, adding they included preventing Tehran building a nuclear weapon. Iran has signaled it may be willing to accept an interim deal to reopen the Strait of Hormuz in exchange for Washington ending its blockade of Iranian ports, while postponing more complex negotiations over the country’s nuclear program. It is insisting on keeping some control over shipping through the strait, which Washington is unlikely to accept. Reports said Trump told his advisers he’s not satisfied with Iran’s latest suggestions.
Fed’s FOMC meeting begins today… Monetary policy makers in the U.S. and across the Group of Seven will probably keep their interest rates steady this week. The Federal Reserve’s Open Market Committee (FOMC) meeting begins this morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. This FOMC meeting will likely be the last for Powell as head of the U.S. central bank. Canada, the U.K., Germany and Japan are widely anticipated to leave their interest rates unchanged, too.
The key outside markets today see the U.S. dollar index lower, while Nymex WTI crude oil prices are up and trading around $95.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.32%.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, June gold futures bulls’ next upside price objective is to produce a close above solid resistance at the April high of $4,917.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,300.00. First resistance is seen at $4,700.00 and then at this week’s high of $4,745.80. First support is seen at $4,600.00 and then at $4,550.00. Wyckoff's Market Rating: 5.0.
May silver futures see the next upside price objective for the bulls is closing prices above solid technical resistance at the April high of $83.245. The next downside price objective for the bears is closing prices below solid support at $70.00. First resistance is seen at $75.00 and then at this week’s high of $76.555. Next support is seen at $72.00 and then at $70.00. Wyckoff's Market Rating: 5.0.
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