(Kitco News) – Gold and silver prices are modestly lower in early-morning U.S. trading Tuesday. The metals are pressured in part by a firmer U.S. dollar index today that is trading not far below last week’s two-year high. Also, the bearish chart postures for both gold and silver continue to invite the technical sellers. June gold futures were last down $2.80 an ounce at $1,281.00. July Comex silver was last down $0.092 at $14.835 an ounce.
World stock markets were mixed in cautious trading overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.
The stock, financial and commodity markets are trying to recover from the surprise developments on the U.S.-China trade front that saw President Trump threaten new tariffs on imported Chinese products. However, the marketplace is somewhat assuaged Tuesday morning as the Chinese trade delegation is still headed for Washington, D.C. for talks this week, including their chief negotiator. Also, upon reflection, many traders and investors are wondering if Trump’s threatening tweets on Sunday were just a negotiating tactic. Still, Trump’s trade advisors said Monday that the Chinese commitments on trade had seen “erosion.”
Trump tweeted that some degree of a trade deal with China needs to happen by the end of this week, or new tariffs go into effect. It’s a very hard read on the outcome of this matter. Thus, the keener uncertainty among traders and investors will play better into the hands of market bears.
Gold and silver markets bulls have been disappointed their safe-haven metals did not see more demand amid the heightened geopolitical uncertainty that includes the potential U.S.-China trade war escalation but also increased U.S.-Iran tensions. However, reports say demand from major gold-consuming country India is expected to be significantly higher on the geopolitical tensions, especially as this is the time of stronger seasonal demand for gold.
The other key “outside market” today sees Nymex crude oil prices weaker and trading around $61.50 a barrel. There are now chart clues that the oil market has put in a price top.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the IDB/TIPP economic optimism index, and consumer credit.
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 Monday’s 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 $15.25 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