Strong Dollar Stymies Gold, Silver Bulls

(Kitco News) - Gold and silver prices weremoderately down in early afternoon trading Monday. However, both markets werewell up from their daily lows to begin to suggest the bears are now exhaustedfrom their recent downside assault. Early on today gold sank to a two-month lowand silver dropped to a five-week bottom. The recent solid rally in the U.S.dollar index continues to curtail buying interest in the precious metalsmarkets. June Comex gold futures were last down $4.40 an ounce at $1,319.00.July Comex silver was last down $0.097 at $16.40 an ounce.

Goldand silver worked farther off their daily lows and crude oil rallied at midday whenIsraeli President Netanyahu outlined a detailed presentation that Iran ischeating on its nuclear weapons deal with the West. This will make it easierfor President Trump to pull out of the deal when it comes up for renewal thismonth. Such would also be potentially destabilizing to the Middle East.

Junegold futures prices Monday morning dipped below the technically important200-day moving average for the first time since late-December, but then poppedright back above it. This is one encouraging sign the recent selling pressurein the gold market could be ending. However, it will be important for June goldprices to hold above the 200-day moving average early this week. If such is thecase, it would be one clue a near-term market bottom is in place.

Twoimportant meetings will have the attention of the world marketplace this week:the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday,and the above-mentioned U.S. high-level trade delegation that will be in Chinalater this week. And then on Friday is the U.S. employment report from theLabor Department-arguably the most important U.S. data point of the month.

Thekey “outside markets” on Monday see the U.S. dollar index trading firmer.Prices last week hit a 3.5-month high. Meantime, Nymex crude oil prices arehigher and trading above $68.00 a barrel. The U.S. oil rig count hit athree-year high last week, which could limit the upside in crude oil pricesthis week.

Technically,the gold bulls still have the slight overall near-term technical advantage butare fading and need to show fresh power soon to avoid more serious near-termchart damage. Gold bulls' next upside near-term price breakout objective is toproduce a close above solid technical resistance at last week’s high of$1,337.60. Bears' next near-term downside price breakout objective is pushingprices below solid technical support at the March low of $1,309.30. Firstresistance is seen at today’s high of $1,325.90 and then at $1,330.00. Firstsupport is seen at $1,309.00 and then at $1,300.00. Wyckoff's Market Rating:5.5

Thesilver bears have the overall near-term technical advantage. Silver bulls' nextupside 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 March low of $16.185.First resistance is seen at today’s high of $16.58 and then at $16.75. Nextsupport is seen at today’s low of $16.225 and then at $16.185. Wyckoff's MarketRating: 3.0.

JulyN.Y. copper closed down 25 points at 307.20 cents today. Prices closed nearmid-range. The copper bulls and bears are on a level overall near-termtechnical playing field. A four-week-old uptrend on the daily bar chart has beennegated. Copper bulls' next upside price objective is pushing and closingprices above solid technical resistance at the April high of 321.80 cents. Thenext downside price objective for the bears is closing prices below solidtechnical support at the March low of 295.85 cents. First resistance is seen attoday’s high of 308.90 cents and then at 310.00 cents. First support is lastweek’s low of 305.20 cents and then at 302.50 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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