Rallies In Equities Continue To Punish Gold, Silver Prices

(Kitco News) – Gold and silver prices are again lower in early U.S. trading Tuesday. Gold prices dropped to a nearly four-month low. “Risk-on” trader and investor attitudes are seeing monies flowing into stocks, but squelching buying interest in the safe-haven metals markets. June gold futures were last down $8.50 an ounce at $1,282.70. May Comex silver was last down $0.085 at $14.89 an ounce.

Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward higher openings and at six-month highs when the New York day session begins. The U.S. indexes are closing in on their record highs scored last fall.

There are presently no major geopolitical issues in the world marketplace to rattle the markets and trader and investor attitudes remains generally upbeat. In the U.S., the world’s largest economy is growing modestly to a bit better, but the Federal Reserve does not appear inclined to raise interest rates. Many reckon that’s a “Goldilocks” scenario for the stock market.

The key outside markets today find the U.S. dollar index slightly up. Meantime, Nymex crude oil prices are slightly higher and trading around $63.50 a barrel.

The marketplace is awaiting China’s gross domestic product report due out Wednesday morning. Most are expecting upbeat numbers north of 6% annual GDP growth for the world’s second-largest economy.

U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NAHB housing market index, and industrial production and capacity utilization.

Technically, the gold bulls have lost their overall near-term technical advantage. A downtrend line 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 the April high of $1,314.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the April low of $1,284.90. First resistance is seen at Monday’s high of $1,295.20 and then at $1,300.00. First support is seen at $1,280.00 and then at $1,275.00. Wyckoff’s Market Rating: 5.0

May silver futures bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the April high of $15.31 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 $15.065. Next support is seen at Monday’s low of $14.795 and then at $14.70. Wyckoff’s Market Rating: 4.0.

By Jim Wyckoff
For Kitco News

Contact jwyckoff@kitco.com

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