Gold Weaker, At 5-Mo. Low; More Downside Likely, Unless...

(Kitco News)- Goldprices are modestly lower and dropped to another five-month low in early U.S.trading Thursday. A strong U.S. dollar continues to cast a bearish shadow overthe precious metals markets. June Comex gold futures were last down $3.30 anounce at $1,288.20. July Comex silver was last up $0.079 at $16.45 an ounce.

Worldstock markets were mixed overnight. U.S. stock indexes are pointed towardslightly lower openings when the New York day session begins. Another negativefor the gold and silver markets is the relatively upbeat trader and investorattitudes presently in the market place. However, there are at least a coupleof 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 andsilver markets.

Europeanmarkets are a bit concerned about Italy and notions that country may threatento pull out of the Euro zone bloc if the EU does not write off some of itsheavy financial debt owed to the bloc. This situation will only add to therecent selling pressure against the Euro currency, and in turn be a bullishelement for the surging U.S. dollar. However, a destabilized European Unionwould favor gold due to keener risk aversion.

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

Thegold market needs a booster shot of bullish news, and history shows the worldmarketplace won’t remain calm indefinitely.

TheU.S. trade meetings with China in Washington, D.C., begin in earnest today.Also, an agreement on an updated NAFTA trade deal between the U.S., Canada andMexico is unlikely to be announced late this week, as the Trump administrationhad hoped would be the case.

Thekey “outside markets” today find Nymex crude oil prices higher and hitting a3.5-year high above $72.00 a barrel. Brent crude oil futures prices pushedabove $80.00 a barrel today. Meantime, the U.S. dollar index is firmer andhovering near this week’s five-month high.

U.S.economic data due for release Thursday includes the weekly jobless claimsreport, the Philadelphia Fed business survey, and the leading economicindicators report.

Technically,June gold bears have the overall near-term technical advantage and still havemomentum. Gold bulls' next upside near-term price breakout objective is toproduce a close above what is now solid technical resistance at $1,300.00.Bears' next near-term downside price breakout objective is pushing prices belowsolid technical support at the December low of $1,247.20. First resistance isseen at the overnight high of $1,294.00 and then at $1,300.00. First support isseen at the overnight low of $1,284.00 and then at $1,280.00. Wyckoff's MarketRating: 3.5.

Julysilver futures bears have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at last week’s high of $16.865 an ounce. The next downsideprice breakout objective for the bears is closing prices below solid support at$16.00. First resistance is seen at $16.50 and then at Tuesday’s high of $16.565.Next support is seen at this week’s low of $16.19 and then at the May low of $16.07.Wyckoff's Market Rating: 3.0.

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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