Gold Held Hostage By Strong Greenback

(Kitco News) - Gold pricesare once again weaker in early U.S. trading Tuesday. The yellow metal atpresent is caught in a strangle-hold from an appreciating U.S. dollar indexthat hit a 4.5-month high overnight. June Comex gold futures were last down $3.50an ounce at $1,310.30. July Comex silver was last down $0.01 at $16.485 anounce.

Itis critical for the gold market bulls to keep their precious metal above chartsupport at $1,300.00. A drop below that key level would set off sell stoporders in the futures market, which would likely help to trigger of a solid legdown in prices.

Thereis growing concern the U.S. will not renew a deal struck with Iran in 2015 tocurtail its nuclear arms development. President Trump says he will announce hisdecision on the matter Tuesday afternoon. The Iran nuke agreement expiresSaturday. If the U.S. pulls out of the agreement, sanctions against Iran willbe reapplied, including ostensibly sharply curbing Iranian oil exports.

Inovernight news, China’s exports increased 12.9% in April, year-on-year, whileits imports were up 21.5%. Both numbers beat market expectations. China’s topeconomic advisor will travel to the U.S. next week to resume trade-disputenegotiations between the world’s two largest economies.

The“outside markets” today find crude oil prices lower on profit taking after hittinga 3.5-year high above $70.00 on Monday. Today’s announcement from Trump islikely to move the oil markets.

Meantime,the U.S. dollar index is higher and hit a 4.5-month high overnight. The indexis in a steep price uptrend and the greenback bulls have technical power tosuggest more upside in the near term.

U.S.economic data due for release Tuesday includes the weekly Goldman Sachs andJohnson Redbook retail sales reports, the NFIB small business index, and theIDB/TIPP economic optimism index.

Technically,Junegold bulls and bears are on a level overall near-term technical playingfield. Gold bulls' next upside near-term price breakout objective is to producea close above solid technical resistance at $1,338.00. Bears' next near-termdownside price breakout objective is pushing prices below solid technical supportat $1,300.00. First resistance is seen at this week’s high of $1,320.10 andthen at $1,325.00. First support is seen at the May low of $1,302.30 and thenat $1,300.00. Wyckoff's Market Rating: 5.0

Julysilver futures bears have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at $17.00 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at $16.00. First resistanceis seen at last week’s high of $16.62 and then at $16.75. Next support is seenat $16.38 and then at $16.25. Wyckoff's Market Rating: 3.5.

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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