Gold, Silver See Mild Profit Taking As Outside Mkts Turn Negative

(Kitco News) - Gold and silver prices backed well off their daily highs Thursday, on profit-taking pressure from recent gains. Earlier in the day gold hit a five-week high and silver notched an 11-month high. The key "outside markets" in morning trading also turned negative for the precious metals markets, as the U.S. dollar index rebounded well up from its daily low and Nymex crude oil futures prices moved lower. June gold futures were last down $3.40 an ounce at $1,251.00. May silver futures were last down $0.06 at $17.075.

An upbeat U.S. jobless claims report Thursday morning showed the lowest claims number since 1973. That also helped to pressure the precious metals. However, other U.S. economic data released Thursday--the Chicago Fed national activity index and the Philadelphia Fed business survey--were more downbeat.

The latest European Central Bank monetary policy meeting Thursday saw the ECB leave its interest rates unchanged, as expected. However, ECB president Mario Draghi at his press conference hinted the more monetary policy stimulus could be in the offing in the coming months. His remarks pressured the Euro currency, and in turn gave the U.S. dollar index a boost. European stock markets also saw selling pressure in the wake of Draghi’s dovish remarks on ECB monetary policy.

The other key “outside market” saw crude oil prices lower in a choppy trading session. Crude oil prices overnight hit new highs for this year, with June Nymex crude oil trading above $44.00 a barrel. World stock markets continue to closely follow and react to the daily price movements in crude oil. Reports Thursday said a Saudi Arabian oil official said production cuts will be discussed at an OPEC meeting in June.

Technically, June gold futures prices closed nearer the session low today. The gold bulls still have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,287.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of 1,225.40. First resistance is seen at $1,264.70 and then at today’s high of $1,272.40. First support is seen at today’s low of $1,244.40 and then at $1,240.00. Wyckoff’s Market Rating: 6.5

May silver futures prices closed nearer the session low today. The silver market bulls still have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.395. First resistance is seen at $17.255 and then at $17.50. Next support is seen at today’s low of $16.755 and then at $16.50. Wyckoff's Market Rating: 7.0.

May N.Y. copper closed up 120 points at 225.00 cents today. Prices closed near mid-range and hit a four-week high today. The copper bulls have regained 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 April low of 219.35 cents. First resistance is seen at today’s high of 228.35 cents and then at 230.00 cents. First support is seen at today’s low of 221.85 cents and then at 219.35 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com