Gold Down, Back Below $1,300; U.S.-N. Korea Summit No Markets-Mover

(Kitco News) - Gold pricesaremoderately lower and have dropped back below the psychologically important$1,300.00 level in early U.S. trading Tuesday. Gold and silver markets did notreact significantly to the just-concluded U.S.-North Korea summit. August Comex gold futures were last down $4.10 an ounce at $1,299.10. July Comex silver waslast down $0.122 at $16.825 an ounce.

Theworld marketplace is taking in stride the apparent positive conclusion of thesummit meeting on denuclearization between U.S. President Donald Trump andNorth Korean President Kim Jong Un. World stock markets were mixed to weakerafter the meeting, with U.S. stock indexes set to open steady to slightly lowerwhen the New York day session begins.

Gold,U.S. Treasuries and the world currency markets were showing muted reactions tothe summit’s conclusion-probably because traders and investors realize thereare going to be lots of twists and turns on the road to completedenuclearization of North Korea, but still reckon this is a good start.

Alsoon tap early today was the U.S. consumer price index (CPI) for May. CPI came inat up 0.2% from April and up 2.8%, year-on-year. Those numbers were in linewith market expectations and had little impact on the markets.

Attentionwill quickly turn to the Federal Reserve’s Open Market Committee (FOMC) meetingthat begins today and ends Wednesday afternoon with a statement. It is widelyexpected the FOMC will raise U.S. interest rates by 0.25% at this meeting. FedChair Jerome Powell will have a press conference following the meeting.

TheEuropean Central Bank also holds its monetary policy meeting on Thursday. Nochange is expected in ECB policy, but the central bank is still on a path ofeasy money that is keeping its interest rates very low, and diverging withthose of the U.S. By the end of the year the spread between key U.S. and Eurozone interest rates is expected to be around 3.0%.

Thekey “outside markets” today find Nymex crude oil prices slightly lower and tradingright around $66.00 a barrel. The U.S. dollar index is slightly higher earlytoday.

U.S.economic data due for release Tuesday includes the weekly Goldman Sachs andJohnson Redbook retail sales reports, the NFIB small business index, theconsumer price index, real earnings and the monthly Treasury budget statement.

Technically,August gold bulls and bears are in a level overall near-term technical playingfield. A seven-week-old downtrend on the daily bar chart has been negated. Goldbulls' next upside near-term price breakout objective is to produce a closeabove the May high of $1,332.40. Bears' next near-term downside price breakoutobjective is pushing prices below solid technical support at the May low of $1,286.80.First resistance is seen at last week’s high of $1,307.80 and then at lastweek’s high of $1,312.60. First support is seen at the Junes low of $1,293.10and then at $1,286.70. Wyckoff's Market Rating: 5.0

Julysilver futures bulls have the overall near-term technical advantage as priceshit a six-week high on Monday. Silver bulls' next upside price breakoutobjective is closing prices above solid technical resistance at $17.00 anounce. The next downside price breakout objective for the bears is closingprices below solid support at the June low of $16.335. First resistance is seenat Monday’s high of $16.975 and then t $17.00. Next support is seen at Monday’slow of $16.77 and then at $16.645. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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