Gold, Silver Punished By Powerful Greenback Gains

(Kitco News) - Gold and silver prices are solidly down and have dropped to 4.5-month lows in early-afternoonU.S. trading Tuesday. Gold is struggling to hold above the very important$1,300.00 price level. The recent solid rally in the U.S. dollar index, whichhit a four-month high today, continues to squelch buyer interest in theprecious metals markets. Chart-based selling has also kicked in for gold andsilver recently, as their near-term technical postures have deteriorated. June Comex gold futures were last down $11.90 an ounce at $1,307.20. July Comex silver was last down $0.256 at $16.145 an ounce.

Junegold futures for the second day in a row dropped below the important 200-daymoving average on the daily chart, which has further emboldening the bears andis inviting more technical selling interest. Gold prices spent just over twoweeks trading below the 200-day MA in December.

Twoimportant meetings have the attention of the marketplace this week: The FederalReserve's Open Market Committee (FOMC) meeting began Tuesday morning and endsWednesday afternoon with a statement. Also, a U.S. high-level trade delegationwill travel to China later this week to try to avert a trade war between theworld's two largest economies. President Trump late Monday decided to delay byone month implementing on the European Union proposed tariffs on aluminum andsteel. Tariffs are in effect for Russia and China.

OnFriday is the U.S. employment report from the Labor Department-arguably themost important U.S. data point of the month.

Nymex crude oil prices are weaker and trading just below $68.00 a barrel. The U.S.oil rig count hit a three-year high last week and the IEA on Monday reportedthat U.S. crude oil production topped 10 million barrels a day in February-arecord. These factors will limit buying interest in oil this week.

Technically,the gold bulls have lost their slight overall near-term technical advantage. Aclose below major psychological support at $1,300.00 would open the door to alarger leg down in prices in the near term. Gold bulls' next upside near-termprice breakout objective is to produce a close above solid technical resistanceat last week's high of $1,337.60. Bears' next near-term downside price breakoutobjective is pushing prices below solid technical support at $1,300.00. Firstresistance is seen at today's high of $1,317.40 and then at this week's high of$1,325.90. First support is seen at $1,300.00 and then at $1,290.00. Wyckoff'sMarket Rating: 5.0

Thesilver bears have the firm overall near-term technical advantage. Silver bulls'next upside price breakout objective is closing prices above solid technicalresistance at $17.00 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at the December low of $15.805.First resistance is seen at $16.25 and then at today's high of $16.37. Nextsupport is seen at today's low of $16.15 and then at $16.00. Wyckoff's MarketRating: 2.5.

JulyN.Y. copper closed down 345 points at 303.95 cents today. Prices closed nearerthe session low and hit a three-week low today. The copper bulls and bears areon a level overall near-term technical playing field. Copper bulls' next upsideprice objective is pushing and closing prices above solid technical resistanceat the April high of 321.80 cents. The next downside price objective for thebears is closing prices below solid technical support at the March low of295.85 cents. First resistance is seen at today's high of 308.50 cents and thenat 310.00 cents. First support is today's low of 301.95 cents and then at300.00 cents. Wyckoff's Market Rating: 5.0.

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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