Gold Backs Off On Profit Taking, But Bullish “Outside Markets” Limit the Downside

(Kitco News) - Gold prices ended the U.S. day session moderately lower Monday, as investor risk appetite has up-ticked to start the trading week. Some profit taking from recent gains also weighed on the safe-haven metal. Last week gold prices hit a two-year high. August Comex gold was last down $4.80 an ounce at $1,290.00. July Comex silver was last up $0.099 at $17.51 an ounce.

The key “outside markets” on Monday saw the U.S. dollar index lower and Nymex crude oil prices higher. That’s a bullish daily element for the precious metals that did limit selling interest in them.

Risk appetite is on the upswing early this week, as U.S. and world stock markets were solidly higher Monday. However, with focus squarely on Thursday’s U.K. vote on whether that country stays in or leaves the European Union, look for traders and investors to scale back their risk-on behavior as Thursday’s vote approaches. The latest polls show a slight lead for the “stay” camp, and that caused world stock markets to rally Monday. However, the polls are close, which is still causing some uncertainty and anxiety in the marketplace. A U.K. vote to leave the EU would likely create high uncertainty and tensions in world stock, currency and financial markets. Thursday’s vote could be the most important world markets event of the summer.

There was no major U.S. economic data due for release Monday.

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Technically, August gold futures prices closed nearer the session high. 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 last week’s high of $1,281.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,275.00. First resistance is seen at $1,310.00 and then at $1,310.00. First support is seen at today’s low of $1,280.80 and then at $1,275.00. Wyckoff’s Market Rating: 7.5

July silver futures prices closed nearer the session high today. The silver market bulls 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 $16.75. First resistance is seen at today’s high of $17.66 and then at last week’s high of $17.88. Next support is seen at today’s low of $17.30 and then at last week’s low of $17.105. Wyckoff's Market Rating: 7.5.

July N.Y. copper closed up 430 points at 209.40 cents today. Prices closed near the session high today, on short covering. The copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 214.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the January low of 195.80 cents. First resistance is seen at last week’s of 211.90 cents and then at 214.50 cents. First support is seen at today’s low of 205.20 cents and then at 203.50 cents. Wyckoff's Market Rating: 3.0.

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