Gold Prices Weaker; No Safe-Haven Support As Geopolitics Heat Up

(Kitco News) – Gold prices are trading slightly down in early-morning U.S. trading Monday. The safe-haven metals bulls are perplexed that gold and silver prices have not received a good bid from fresh geopolitical developments that have tanked world stock markets today. June gold futures were last down $1.10 an ounce at $1,280.30. July Comex silver was last down $0.158 at $14.82 an ounce.

World stock markets were rattled and traded sharply lower overnight on news that President Trump tweeted a threat to further increase U.S. trade tariffs on Chinese goods. The sense of the marketplace had been that a U.S.-China trade deal was close and could be finalized late this week. Commodity markets were also roiled overnight on ideas any escalation in the U.S.-China trade war would translate into slower global economic growth. U.S. stock indexes are pointed toward sharply lower openings when the New York day session begins.

As of this writing, the Chinese trade delegation was still headed to the U.S. for talks this week. Upon reflection, many traders and investors realize they should not have become so optimistic on the trade war being resolved, given Turmp’s propensity to make knee-jerk decisions.

China stock markets fell from 5% to 7% overnight, making those losses the largest one-day declines in three years.

The Chinese yuan plunged on the world foreign exchange market. The U.S. dollar index is trading slightly up today, while Nymex crude oil prices are lower and trading around $61.00 a barrel.

Adding to geopolitical concerns to start the trading week, the U.S. is sending a naval task force, including an aircraft carrier, to the Middle East as a show of force against Iran. A U.S. official said the U.S. warships are “fully prepared” to respond to any attack from Iran or others.

U.S. economic data due for release Monday includes the employment trends index and the global services PMI.

Technically, the gold bears have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at the overnight high of $1,287.40 and then at $1,290.90. First support is seen at $1,275.00 and then at last week’s low of $1,267.30. Wyckoff’s Market Rating: 3.5

July silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.15 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at $15.00 and then at $15.15. Next support is seen at last week’s low of $14.57 and then at $14.50. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff
For Kitco News


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