Gold, silver pull back on some profit-taking, normal consolidation

Gold and silver prices are lower in midday U.S. dealings Thursday, on routine downside corrections following recent gains. Some profit-taking from the shorter-term futures traders was also featured today. A rebound in the U.S. dollar index today was also a negative daily element for the metals. Once again, it appears the two metals are tracking the U.S. stock indexes, which are lower at midday. June gold futures were last down $27.00 an ounce at $1,725.00. July Comex silver prices were last down $0.556 at $17.47 an ounce.

Attitudes overall are still generally upbeat late this week as governments continue to reopen businesses that had been shuttered for weeks. Some sporting events have been scheduled to resume in the coming weeks and there are rising hopes autumn sports can be played.

Also supporting more positive trader and investor sentiment is the surprising rally in crude oil prices that sees Nymex crude oil trading above $34.00 a barrel Thursday morning. The strong rally in the oil market has caught most oil market watchers by surprise, given significantly reduced demand and still-burdensome global supplies. Just a few weeks ago Nymex May crude oil futures traded as low as -$40 a barrel just before the contract expired.

Global economic data for May is starting to improve from the dire numbers seen in April. The IHS Markit composite purchasing managers index (PMI) for May in the Euro zone rose to 30.5 in May from 13.6 in April. A reading below 50.0 suggests contraction. The U.K.’s PMI for the same period came in at 28.9 from 13.8. Japan’s PMI for the same period was 27.4 versus 25.8. Australia’s composite May PMI was 36.4 versus 21.7 in April.

China has begun its most important political event of the year, the National People’s Congress, after a delay because of the Covid-19 pandemic. The meetings signal what the government is calling its victory over the outbreak that began late last year, and will outline key economic and social goals for the year. U.S.-China relations have soured the past several weeks, amid the pandemic that the U.S. is blaming on China. President Trump tweeted late Wednesday that China’s “disinformation and propaganda attack on the United States and Europe is a disgrace.” The U.S. Senate on Wednesday moved to ban Chinese companies from trading on U.S. stock exchanges.

The other important outside markets see the yield on the benchmark U.S. Treasury 10-year note is currently around 0.67%.

Technically, June gold futures saw no chart damage occur today. The bulls still have the solid overall near-term technical advantage. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,666.20. First resistance is seen at $1,735.00 and then at today’s high of $1,751.70. First support is seen at today’s low of $1,715.30 and then at $1,700.00. Wyckoff's Market Rating: 7.5

July silver futures saw a corrective and profit-taking pullback after hitting a nearly three-month high Wednesday. The silver bulls still have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $19.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $18.00 and then at this week’s high of $18.165. Next support is seen at today’s low of $17.26 and then at $17.00. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed down 295 points at 243.05 cents today. Prices closed nearer the session low today and on profit taking after hitting a two-month high early on today. The copper bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 255.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 230.00 cents. First resistance is seen at today’s high of 246.80 cents and then at 250.00 cents. First support is seen at 240.00 cents and then at 237.50 cents. Wyckoff's Market Rating: 6.5.

 

By Jim Wyckoff
For Kitco News

 

David