Gold, Silver Prices Lower As Greenback Rallies

(Kitco News) - Gold and silver prices are moderately lower in early U.S. trading Monday, pressuredin part by an appreciating U.S. dollar on the world foreign exchange market.There is also little risk aversion in the marketplace at present, which is anegative for the safe-haven metals. June Comex gold futures were last down $8.30an ounce at $1,329.90. May Comex silver was last down $0.208 at $16.955 anounce.

Worldstock markets were mostly lower overnight, on profit taking from recent gains.U.S. stock indexes are pointed toward slightly higher openings when the NewYork day session begins.

U.S.Treasury bond yields are on the rise again early this week, with the yield onthe 10-year note nearing 3%, which is a four-year high. Some argue that risingbond yields pull investor demand away from gold, as gold produces no dividendsor interest income. However, rising bond yields
alsosuggest rising inflationary pressures. Problematic inflation is a bullishelement for hard assets like the metals. Still, present worldwide inflationlevels are not (yet) deemed problematic.

Thekey “outside markets” on Monday morning see the U.S. dollar index tradinghigher and hitting a more-than-three-month high. Nymex crude oil prices areweaker and trading just above $68.00 a barrel. Oil prices last week hit a3.5-year high.

U.S.economic data due for release Monday includes the Chicago Fed national activityindex, the U.S. flash services and manufacturing PMIs, and existing home sales.

Technically,Junegold bulls still have the overall near-term technical advantage, but arefading a bit. Gold bulls' next upside near-term price breakout objective is toproduce a close above solid technical resistance at the January high of $1,375.50.Bears' next near-term downside price breakout objective is pushing prices belowsolid technical support at the March low of $1,309.30. First resistance is seenat the overnight high of $1,337.60 and then at $1,345.00. First support is seenat $1,325.00 and then at the April low of $1,322.60. Wyckoff's Market Rating: 6.0

May silver futures bulls have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at the January high of $17.785 an ounce. The next downsideprice breakout objective for the bears is closing prices below solid support at$16.50. First resistance is seen at the overnight high of $17.135 and then at $17.25.Next support is seen at $16.75 and then at last week’s low of $16.545.Wyckoff's Market Rating: 6.0.

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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