Gold Sharply Down On Profit Taking, Bearish Outside Markets

(Kitco News) - Gold prices ended the U.S. day session sharply lower Monday, pressured by profit taking from recent gains, by weak long liquidation in the futures market, and by better risk appetite in the general marketplace to start the trading week. June Comex gold futures were last down $26.60 an ounce at $1,267.40. July Comex silver was last down $0.437 at $17.09 an ounce.

It was a “risk-on” day in the marketplace Monday, as world stock markets were mostly higher.

Nymex crude oil prices were lower Monday afternoon and trading below $44.00 a barrel. A big wildfire in Canada has stopped oil production in that region, which is a near-term bullish factor for the world oil market. However, a big shake-up in the Saudi Arabian government over the weekend saw its oil minister fired. The move was deemed bearish for oil and makes any near-term crude oil production cuts from Saudi Arabia much less likely. OPEC meets in early June to discuss the matter.

The other key outside market on Monday saw the U.S. dollar index firmer. The very recent rebound in the dollar index has put some selling pressure into raw commodity markets. Still, the overall near-term price trend for the dollar index remains down.

In other overnight news, China’s exports fell 10.9% in April, year-on-year, which was more than expected. Meantime, China’s imports were up 7.6%, year-on-year. China is the world’s second-largest economy and the world’s largest raw commodity importer.

U.S. economic data released Monday was light.

Technically, June gold futures prices closed nearer the session low today. The gold bulls still have the overall near-term technical advantage, but are fading again. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May of $1,306.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,250.00. First resistance is seen at $1,272.40 and then at 1,280.00. First support is seen at today’s low of $1,263.60 and then at $1,250.00. Wyckoff’s Market Rating: 6.5

July silver futures prices closed nearer the session low today and hit a two-week low. The silver market bulls still have the overall near-term technical advantage but are fading. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $18.06 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.80. First resistance is seen at $17.25 and then at today’s high of $17.505. Next support is seen at today’s low of $16.96 and then at $16.80. Wyckoff's Market Rating: 6.5.

July N.Y. copper closed down 475 points at 210.65 cents today. Prices closed near the session low and hit a four-week low today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 220.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of 207.90 cents. First resistance is seen at 213.70 cents and then at today’s high of 215.55 cents. First support is seen at 210.00 cents and then at 207.90 cents. Wyckoff's Market Rating: 3.0.

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