(Kitco News) - Gold prices ended the U.S. day session modestly weaker Thursday and hit a four-week low. Follow-through technical selling pressure was featured after strong losses posted Wednesday. The rally in the U.S. dollar index this week and the late-week downturn in crude oil prices were also bearish outside market elements working against the precious metals bulls. April Comex gold was last down $2.60 at $1,221.40 an ounce. May Comex silver was last down $0.082 at $15.19 an ounce.
There has been near-term technical damage inflicted in gold late this week, as a price uptrend on the daily bar chart has been negated, which has prompted chart-based selling. Silver bulls are also fading on a near-term technical basis.
World stock markets were weaker Thursday, ahead of a long Easter holiday weekend for most markets in many countries. U.S. stock indexes were lower Thursday afternoon. This week’s rally in the U.S. dollar index and the general late-week downturn in the raw commodity sector, led by crude oil, are also bearish elements for world stock markets. Nymex crude oil futures were trading lower again Thursday and have dropped below the key $40.00-a-barrel level. China’s stock markets were down Thursday on worries about capital flight and renewed short-selling of stock as China monetary officials further weakened the Chinese yuan currency against the U.S. dollar.
There is also growing talk in the marketplace the U.S. Federal Reserve could raise interest rates at its April meeting, which is deemed bearish for stocks and most commodities. There have been press reports recently, including Fed officials’ comments, which suggest there is a growing camp of FOMC-voting Fed members that are moving toward the hawkish camp on U.S. monetary policy. Just recently stock and many raw commodity markets had rallied following the last FOMC meeting results that were deemed as leaning to the dovish side of U.S. monetary policy.
Also, the specter of further terror attacks in Europe, after this week’s events in Brussels, has many wondering if the European Union can survive with its current open borders for all EU countries. The uncertainty of this matter is a bearish element for European stock and financial markets.
Technically, April gold futures prices closed nearer the session high and hit a fresh four-week low today. Prices also closed at a bearish weekly low close today. Gold bulls still have the overall near-term technical advantage, but are fading badly and need to show fresh power soon. A nearly three-month-old uptrend on the daily bar chart was negated Wednesday. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,260.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at $1,226.00 and then at $1,230.00. First support is seen at today’s low of $1,211.20 and then at $1,200.00. Wyckoff’s Market Rating: 6.0
May silver futures prices closed near mid-range, hit a three-week low and closed at a bearish weekly low close today. The silver market bulls have faded badly and are now on an overall level near-term technical playing field with the bears. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $16.17 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at today’s high of $15.335 and then at $15.50. Next support is seen at today’s low of $15.105 and then at $15.00. Wyckoff's Market Rating: 5.0.
May N.Y. copper closed down 60 points at 222.95 cents today. Prices closed nearer the session high and did close at a bearish weekly low close today. The key “outside markets” were bearish for copper today as the U.S. dollar index was higher and crude oil prices were lower. The copper bulls still have the slight overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the March high of 232.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the 215.00 cents. First resistance is seen at 225.00 cents and then at 228.00 cents. First support is seen at today’s low of 220.55 cents and then at 217.00 cents. Wyckoff's Market Rating: 5.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
