Gold, Silver Prices Sharply Down On Rebound In USDX, Technical Selling

(Kitco News) – Gold and silver prices are trading solidly lower in early U.S. trading Thursday, pressured by a rebound in the U.S. dollar index and by chart-based sellers entering the futures markets. June gold futures were last down $15.40 an ounce at $1,298.40. May Comex silver was last down $0.284 at $14.955 an ounce.

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. There remains minimal risk aversion in the marketplace late this week, which continues to be a bearish element for the safe-haven metals.

The marketplace is this week digesting economic data on several fronts that suggest world economic growth is slowing down and that the major central banks of the world will refrain from raising interest rates and could even ease their monetary policies. This theme is a mixed bag for stock markets but should be bullish for world government bond prices. U.S. first-quarter corporate earnings reports are starting to come out, with many expecting a generally downbeat theme to emerge.

In overnight news, China’s consumer inflation was reported rising in March, at up 2.3%, year-on-year, versus a reading of up 1.5% in February. China’s producer price index was up 0.4% in March versus up 0.1% in February, year-on-year.

On the Brexit front, European Union officials met Wednesday to discuss extending a window for the U.K. to leave the bloc. The EU officials granted the U.K. an extension until Oct. 31. Now, U.K. Prime Minister Theresa May has six months to forge a deal with Parliament on a “soft Brexit.”

The other key outside markets today finds Nymex crude oil prices are weaker and trading around $64.00 a barrel. The International Energy Agency today said global oil output declined in March by 530,000 barrels per day.

U.S. economic reports due for release Wednesday include the weekly jobless claims report and the producer price index.

Technically, the gold bulls still have the overall near-term technical advantage. However, a downtrend line is still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the March high of $1,330.80. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,284.90. First resistance is seen at $1,310.00 and then at this week’s high of $1,314.70. First support is seen at this week’s low of $1,295.50 and then at $1,290.00. Wyckoff’s Market Rating: 6.0

May silver futures bears have the slight overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $15.65 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.75. First resistance is seen at the overnight high of $15.215 and then at this week’s high of $15.31. Next support is seen at the March low of $14.86 and then at $14.75. Wyckoff’s Market Rating: 4.5.

By Jim Wyckoff
For Kitco News


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