Gold Ends Weaker, Can't Hold Modest Early Gains

(Kitco News) - Gold prices ended the U.S. day session modestly lower Thursday and gave up early tepid gains. Prices closed at a seven-week low close today. Price action earlier saw some short covering in the futures market and bargain hunters buying the dip in the cash market. However, gold prices started eroding when crude oil prices backed down from their session highs. June Comex gold was last down $3.30 an ounce at $1,220.40. July Comex silver was last up $0.084 at $16.345 an ounce.

Most world stock markets were higher overnight. U.S. stock indexes were narrowly mixed in afternoon trading. Higher crude oil prices are partly responsible for the recent rallies in world stock markets. Brent and Nymex crude oil futures pushed above the key $50-a-barrel level Thursday, on an intra-day basis. This week’s strength in world equity markets has been a bearish element for the safe-haven gold market.

The other key “outside market” on Thursday saw the U.S. dollar index trading weaker. Still, the USDX is in a three-week-old uptrend on the daily bar chart. The recent strength in the greenback has also been negative for the precious metals markets.

U.S. economic data released Thursday included the weekly jobless claims report and durable goods orders. Overall, the data was deemed upbeat, which falls into the camp of the U.S. monetary policy hawks, who favor an interest rate hike sooner rather than later.

Technically, June gold futures prices closed nearer the session low and closed at a seven-week low close today. The gold still bulls have the slight overall near-term technical advantage but have faded badly and need to show fresh power soon. Prices are in a three-week-old downtrend on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at today’s high of $1,234.60 and then at $1,240.00. First support is seen at this week’s low of $1,217.70 and then at the March low of $1,207.70. Wyckoff’s Market Rating: 5.5

July silver futures prices closed nearer the session low. Prices Wednesday hit a five-week low. The silver market bulls have the slight overall near-term technical advantage, but have faded badly recently and a three-week-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at this week’s high of $16.59 and then at $16.75. Next support is seen at this week’s low of $16.185 and then at $16.00. Wyckoff's Market Rating: 5.5.

July N.Y. copper closed up 25 points at 210.40 cents today. Prices closed nearer the session 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 200.00 cents. First resistance is seen at today’s high of 212.50 cents and then at 214.00 cents. First support is seen at 208.00 cents and then at 206.50 cents. Wyckoff's Market Rating: 3.0.

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