Gold Solidly Lower As Risk Appetite Is Back; Outside Markets Also Bearish

(Kitco News) - Gold prices closed the U.S. day session solidly lower Tuesday, as “risk-on” trader and investor attitudes are dominating the marketplace so far this week. More profit taking from the shorter-term futures traders was also featured after prices past week hit a two-year high. August Comex gold was last down $20.40 an ounce at $1,271.70. July Comex silver was last down $0.214 at $17.30 an ounce.

The key “outside markets” on Tuesday saw the U.S. dollar index higher and Nymex crude oil prices weaker. That was a bearish daily posture for the precious metals and the raw commodity sector.

Federal Reserve Chair Janet Yellen’s testimony on the economy monetary policy before the U.S. Senate Banking Committee produced no bombshell pronouncements. However, she did continue to imply the Fed is in no hurry to raise U.S. interest rates, mainly due to tepid U.S. economic growth and productivity prospects. Her remarks did not significantly move markets.

World stock markets were again mostly higher Tuesday and U.S. stock indexes were firmer in afternoon New York dealings. The better risk appetite in the marketplace this week is due to polls showing Thursday’s U.K. vote on whether that country stays in or leaves the European Union favor the “stay” camp. However, the polls are close, which is still causing a bit of uncertainty in the marketplace, and will continue to do so until Thursday’s vote. London bookmakers are saying the odds are about 75% the U.K. will stay in the EU. 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.

U.S. economic data due for release Tuesday is light and includes the weekly Goldman Sachs and Johnson Redbook retail sales reports.

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Technically, August gold futures prices closed nearer the session low today. The gold bulls still have the overall near-term technical advantage but are now fading. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at $1,280.00 and then at $1,290.00. First support is seen at today’s low of $1,268.10 and then at $1,260.00. Wyckoff’s Market Rating: 7.0

July silver futures prices closed nearer the session low today. The silver market bulls still have the 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 this week’s high of $17.66 and then at last week’s high of $17.88. Next support is seen at last week’s low of $17.105 and then at $17.00. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed up 225 points at 211.60 cents today. Prices closed near the session high today, on more short covering. The copper bears still have the overall near-term technical advantage but the bulls have gained some upside momentum. 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 June low of 201.30 cents. First resistance is seen at last week’s high of 211.90 cents and then at 214.50 cents. First support is seen at 210.00 cents and then at today’s low of 207.10 cents. Wyckoff's Market Rating: 3.0.

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