Gold Weaker Amid Bearish 'Outside Markets;' Bulls Still Have Technical Advantage

(Kitco News) - Gold prices ended the U.S. day session modestly lower Thursday. Prices briefly popped above unchanged in morning trading following a significantly downbeat U.S. jobless claims report, but the yellow metal saw those gains eroded quickly. Trading in the gold market has turned choppier, but the bulls are maintaining their firm overall near-term technical advantage. June Comex gold futures were last down $3.60 an ounce at $1,271.90. July Comex silver was last down $0.209 at $17.11 an ounce.

The key “outside markets” were in a bearish posture for the precious metals and the raw commodity sector on this day. The U.S. dollar index was firmer today and even shook off the downbeat U.S. jobs number. Gold prices have seen a keener daily inverse trading relationship with the dollar index recently. The other outside market saw Nymex crude oil prices slightly lower and nearer the daily low in afternoon trading after hitting a 5.5-month high early on. An International Energy Agency report Thursday said despite virtually flat-out production by some major world oil producers, the glut of oil on the world markets will subside in the coming months.

World stock markets were mostly weaker overnight. U.S. stock indexes were also weaker in afternoon trading.

In other news, the Bank of England today left its interest rates unchanged at its regular monetary policy meeting, as expected. The BOE said in a statement that if Britain left the European Union it would significantly hurt the U.K.’s economic growth prospects.

Technically, June gold futures prices closed nearer the session low as trading remains choppy. 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 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 today’s high of $1,282.50 and then at 1,287.60. First support is seen at today’s low of $1,266.80 and then at this week’s low of $1,258.50. Wyckoff’s Market Rating: 7.0

July 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 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 $17.50 and then at $17.77. Next support is seen at this week’s low of $16.925 and then at $16.80. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed down 335 points at 207.00 cents today. Prices closed nearer the session low and hit a nearly three-month low today. Prices also scored a bearish “outside day” down on the daily bar chart today. The copper bears have the firm 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 200.00 cents. First resistance is seen at 210.00 cents and then at 212.00 cents. First support is seen at today’s low of 205.90 cents and then at 202.00 cents. Wyckoff's Market Rating: 2.5.

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