Gold Hits 5-Week Low Amid Upbeat Risk Attitudes

(Kitco News) - Gold prices were ending the U.S. day session down and fell to a five-week low Monday. Positive trader and investor attitudes regarding the general marketplace to start the trading week helped to pressure the safe-haven metal. Silver prices hit a six-week low overnight. Both markets did finish well off their daily lows, which begins to suggest the bears may be running out of gas. August Comex gold was last down $11.90 an ounce at $1,244.50. July Comex silver was last down $0.107 at $16.54 an ounce.

Gold prices moved up from their daily lows after the early morning release of the U.S. durable goods orders report that showed a drop of 1.1% in May from April, which was the largest decline in six months. The U.S. dollar index dropped from its session high after the durables report, which in turn was a bit supportive for gold and silver.

In overnight action, gold prices spiked sharply down just after the closely watched German Ifo business confidence index was released. The Ifo index was reported at a record high of 115.1 in June from 114.6 in May. A June Ifo reading of 114.4 was expected. This news also helped to lift European shares and support the keener risk-on mentality in the markets seen Monday.

A quieter geopolitical front recently has been a bearish underlying element for the gold market. However, this situation can change very quickly.

The key “outside markets” on Monday saw Nymex crude oil futures prices modestly higher on more short covering after hitting a 14-month low last week. The oil market bears still have the solid overall near-term technical advantage as prices are trading below $44.00 a barrel. Meantime, the U.S. dollar index was slightly higher in afternoon trading today, but off the daily high after the downbeat U.S. durable goods report. The greenback bears still have the overall near-term technical advantage.

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Technically, August gold futures bears have the overall near-term technical advantage as prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,275.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the May low of $1,217.80. First resistance is seen at $1,250.00 and then at last week’s high of $1,260.00. First support is seen at Monday’s low of $1,236.50 and then at $1,230.00. Wyckoff’s Market Rating: 4.0

July silver bears have the firm overall near-term technical advantage as prices hit a six-week low overnight. The next upside price breakout objective is closing futures 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 the May low of $16.06. First resistance is seen at last week’s high of $16.76 and then at $17.00. Next support is seen at the overnight low of $16.225 and then at $16.00. Wyckoff's Market Rating: 3.0.