Gold Weaker But Up From Daily Lows; Geopolitics Back In Play

(Kitco News) - Gold priceswere modestly lower in early-afternoon U.S. trading Tuesday. Prices were upfrom daily lows amid a U.S. stock market sell-off and some new geopoliticaluncertainties. Still, a very strong U.S. dollar and a slumping crude oil marketare trumping an uptick in geopolitical tensions early this week. June Comex gold futures were last down $2.20 an ounce at $1,301.50. July Comex silver waslast down $0.146 at $16.40 an ounce.

Geopoliticalrisk is squarely on the front burner of the marketplace early this week. TheItalian president on Sunday blocked an anti-establishment government fromforming. There is also an upcoming election in Spain, where the right-wingcandidate is expected to do well. All of this is putting strong downsidepressure on the Euro currency, which fell to a seven-month low against the U.S.dollar overnight. U.S. stocks are also taking a hit today on geopolitics andslumping oil prices.

TheU.S.-North Korea nuclear summit may be back on, as the U.S. has sent a team ofnegotiators and planners to Singapore to set up the summit meeting between U.S.President Trump and North Korean President Kim Jong Un. However, given recentNorth Korean actions, the summit could quickly be off again.

Andthe U.S.-China trade talks continue to vacillate between a trade deal beingreached, and no deal.

U.S.Treasuries are saw safe-haven demand today, on the geopolitics. While goldprices are not seeing much of a safe-haven bid, so far, the Italian and Spanishpolitical uncertainty could boost the yellow metal if the marketplace perceivesthose two countries as moving away from the European Union bloc of countries.My bias is that the downside is limited for safe-haven gold, at present, whatwill all the geopolitical developments going on, which did not mentiondeteriorating U.S. relations with Iran.

Thekey “outside markets” today find Nymex crude oil prices sharply lower, hittinga six-week low and trading around $66.00 a barrel. Last Friday’s bearish weeklylow close and the recent steep downdraft are technical clues the market has putin at least a near-term top. U.S. oil production is at an all-time high andRussia and Saudi Arabia have pledged to open their oil spigots some more.Slumping oil prices are an underlying negative for the raw commodity sector,including the precious metals.

Meantime,theU.S. dollar index is solidly higher and hit a 10.5-month high, as thegreenback continues its surge higher, partly on perceived safe-haven demand.

Technically,gold prices are still in a seven-week-old downtrend on the daily bar chart, butnow just barely. This week’s price action will determine whether the downtrendcontinues or is negated. The gold bears have the slight overall near-termtechnical advantage. Gold bulls' next upside near-term price breakout objectiveis to produce a close above solid technical resistance at the May high of$1,326.30. Bears' next near-term downside price breakout objective is pushingprices below solid technical support at the May low of $1,281.20. Firstresistance is seen at last week’s high of $1,307.20 and then at $1,309.00.First support is seen at today’s low of $1,291.40 and then at $1,286.70.Wyckoff's Market Rating: 4.5

Thesilver bulls and bears are on a level overall near-term technical playingfield. Silver bulls' next upside price breakout objective is closing pricesabove solid technical resistance at $17.00 an ounce. The next downside pricebreakout objective for the bears is closing prices below solid support at theMay low of $16.07. First resistance is seen at today’s high of $16.53 and thenat last week’s high of $16.74. Next support is seen at today’s low of $16.31and then at $16.19. Wyckoff's Market Rating: 5.0.

JulyN.Y. copper closed down 140 points at 306.35 cents today. Prices closed nearmid-range today. The copper bulls and bears are on a level overall near-termtechnical playing field, amid recent choppy trading. 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 May low of 301.40cents. First resistance is seen at 310.00 cents and then at 313.20 cents. Firstsupport is seen at today’s low of 303.00 cents and then at the May low of301.40 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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