Gold Down As Risk Assets Continue To Rally

(Kitco News) - Gold prices were ending the U.S. day session lower and hit a two-week low Tuesday, as traders and investors are in a much more upbeat mood so far this week. That’s fully bearish for the safe-haven metal. Meantime, silver prices slumped to a four-week low today amid solid selling pressure seen recently. June Comex gold was last down $11.80 an ounce at $1,265.70. May Comex silver was last down $0.268 at $17.59 an ounce.

Traders and investors are breathing a general sigh of relief early this week after the first round of the French presidential elections on Sunday determined the centrist candidate Emmanuel Macron and nationalist candidate Marine LePen will square off in the run-off election on May 7. However, LePen fared worse than many expected Sunday and Macron is now projected by early polls to be the decisive winner of the May 7 vote. 

World stock markets were mostly higher Tuesday, on follow-through strength from the gains scored Monday. Reports said the VIX index, which measures stock market volatility, dropped by 26% on Monday, which is the largest one-day drop in six years. That’s a sign of a very upbeat tenor in the marketplace—for now. Traders and investors are fickle. They seem to have forgotten about last week’s worries about U.S. tensions with North Korea and Russia. Those matters will likely be back on the front burner of the marketplace soon.

The key outside markets on Tuesday saw see the U.S. dollar index lower and hitting a 5.5-month low, in another signal that risk assets are in favor this week. Nymex crude oil prices were weaker and hit three-week low Tuesday. The oil bears are now in technical control of the market.

Technically, June gold futures prices closed nearer the session low today. Bulls are fading as a five-week-old uptrend on the daily bar chart has been negated. The gold bulls still have the slight overall near-term technical advantage but need to show fresh power soon to keep it. 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 $1,275.00 and then at this week’s high of $1,280.00. First support is seen at today’s low of $1,262.80 and then at 1,250.00. Wyckoff's Market Rating: 5.5

May silver futures prices closed nearer the session low, hit a four-week low and scored a bearish “outside day” down on the daily bar chart today. The silver market bulls have lost their overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the April high of $18.655 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $18.00 and then at $18.22. Next support is seen at today’s low of $17.525 and then at $17.25. Wyckoff's Market Rating: 5.0.

May N.Y. copper closed up 240 points at 257.65 cents today. Prices closed nearer the session high on more short covering. The copper bears still have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 245.60 cents. First resistance is seen at today’s high of 258.80 cents and then at 260.00 cents. First support is seen at this week’s low of 253.50 cents and then at the April low of 249.40 cents. Wyckoff's Market Rating: 4.0.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)