Gold Weaker, But Selling Pressure Decreases As Bears May Be Exhausted

(Kitco News) - Gold prices are just slightly lower in early-afternoon U.S. trading Thursday. Early on, prices dropped to another five-month low. It appears the bears are near-term exhausted in gold and silver markets, as the selling pressure has decreased significantly. Still, a strong U.S. dollar continues to cast a bearish shadow over the precious metals markets. June Comex gold futures were last down $1.30 an ounce at $1,290.20. July Comex silver was last up $0.124 at $16.495 an ounce.

Another negative for the gold and silver markets is the relatively upbeat trader and investor attitudes presently in the market place, as evidenced by generally rallying world stock markets. However, there are at least a couple of storm clouds building off in the horizon, regarding the geopolitical front. And those storm clouds could soon come to the rescue of the safe-haven gold and silver markets.

European markets are a bit concerned about Italy and notions that country may threaten to pull out of the Euro zone bloc if the EU does not write off some of its heavy financial debt owed to the bloc. This situation will only add to the recent selling pressure against the Euro currency, and in turn be a bullish element for the surging U.S. dollar. However, a destabilized European Union would favor gold due to keener risk aversion.

Also, the apparent unraveling of the brief courtship between the U.S. and North Korea regarding North Korea’s pledge to “de-nuclearize” could produce trader and investor anxiety in the coming weeks.

The gold market needs a booster shot of bullish news, and history shows the world marketplace won’t remain calm indefinitely.

The U.S. trade meetings with China in Washington, D.C., began in earnest today. Also, an agreement on an updated NAFTA trade deal between the U.S., Canada and Mexico is unlikely to be announced late this week, as the Trump administration had hoped would be the case.

The key “outside markets” today see Nymex crude oil prices higher and hitting a 3.5-year high above $72.00 a barrel. Brent crude oil futures prices pushed above $80.00 a barrel today. Meantime, the U.S. dollar index is firmer and hovering near this week’s five-month high.

Technically, gold prices are in a two-month-old downtrend on the daily bar chart. The gold bears have the overall near-term technical advantage. 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 the December low of $1,247.20. First resistance is seen at Wednesday’s high of $1,296.40 and then at $1,300.00. First support is seen at today’s low of $1,284.00 and then at $1,280.00. Wyckoff's Market Rating: 3.5

The silver bears 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 $16.865 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at $16.565 and then at $16.75. Next support is seen at today’s low of $16.335 and then at this week’s low of $16.19. Wyckoff's Market Rating: 3.0.

July N.Y. copper closed up 190 points at 308.95 cents today. Prices closed near mid-range today. The copper bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 321.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 295.85 cents. First resistance is seen at Tuesday’s high of 310.30 cents and then at this week’s high of 313.10 cents. First support is seen at today’s low of 306.90 cents and then at this week’s low of 303.45 cents. Wyckoff's Market Rating: 5.0.