Gold Hits 4-Month Low On Strong Dollar, Technical Selling

(Kitco News) - Gold pricesare solidly down and dropped to a four-month low in early U.S. trading Tuesday.The recent solid rally in the U.S. dollar index, which hit a nearly four-monthhigh overnight, continues to squelch demand in the precious metals markets.Chart-based selling has also kicked in recently, as the technical postures forgold and silver have deteriorated. June Comex gold futures were last down $10.90an ounce at $1,308.80. July Comex silver was last down $0.106 at $16.295 anounce.

Worldstock markets were mostly firmer overnight. U.S. stock indexes are pointedtoward slightly lower openings when the New York day session begins. There isnot much risk aversion in the world markets at present, which is working infavor of the stock markets but against the gold and silver bulls.

Twoimportant meetings have the attention of the marketplace this week: The FederalReserve's Open Market Committee (FOMC) meeting begins 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 oilprices 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.

U.S.economic data due for release Tuesday includes the weekly Goldman Sachs andJohnson Redbook retail sales reports, the U.S. manufacturing PMI, constructionspending, the ISM manufacturing report on business, and domestic auto industrysales.

Technically,Junegold bulls have lost their slight overall near-term technical advantage. Goldbulls' next upside near-term price breakout objective is to produce a closeabove solid technical resistance at last week's high of $1,337.60. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at $1,300.00. First resistance is seen at today's high of $1,317.40and then at $1,320.00. First support is seen at $1,300.00 and then at $1,290.00.Wyckoff's Market Rating: 5.0

July silver 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. Firstresistance is seen at today's high of $16.37 and then at this week's high of $16.58.Next support is seen at the March low of $16.185 and then at $16.00. Wyckoff'sMarket 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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