Gold, Silver Sell Off As U.S. Dollar Surges
(Kitco News) - Gold and silver prices weresolidly lower in early-afternoon U.S. trading Monday. The metals sold off inthe face of an appreciating U.S. dollar on the world foreign exchange market.The U.S. dollar index hit a more-than-three-month high today. There is alsolittle risk aversion in the marketplace at present, which is another bearishelement for the precious metals markets. June Comex gold futures were last down$13.40 an ounce at $1,325.00. May Comex silver was last down $0.518 at $16.65an ounce.
Afeature in the marketplace at present is rising world government bond yields.The U.S. 10-year Treasury note yield is nearing 3%, which is a four-year high.Some argue that rising bond yields are bearish for gold, pulling investordemand away as gold produces no dividends or interest income. However, risingbond yields also suggest rising inflationary pressures. Problematic inflationis a bullish element for hard assets like the metals. Still, present worldwideinflation levels are not (yet) deemed problematic.
Theother key “outside market” on Monday see Nymex crude oil prices slightly weakerand trading just above $68.00 a barrel. Oil prices last week hit a 3.5-yearhigh. Rising oil prices are a bullish factor for the precious metals markets,as crude oil is arguably the leader of the raw commodity sector.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.2924175530478188)
Technically,Junegold futures bulls still have the overall near-term technical advantagebut have faded and need to show fresh power soon to keep it. Gold bulls' nextupside near-term price breakout objective is to produce a close above solidtechnical resistance at the January high of $1,375.50. Bears' next near-termdownside price breakout objective is pushing prices below solid technicalsupport at the March low of $1,309.30. First resistance is seen at today’s highof $1,337.60 and then at $1,345.00. First support is seen at the April low of$1,322.60 and then at $1,312.40. Wyckoff's Market Rating: 6.0
![Live 24 hours silver chart [ Kitco Inc. ]](http://www.kitco.com/images/live/silver.gif)
Maysilver futures bulls have faded quickly after prices last week hit a 2.5-monthhigh. The silver bulls and bears are back on a level overall near-termtechnical playing field. Silver bulls' next upside price breakout objective isclosing prices above solid technical resistance at last week’s high of $17.36an ounce. The next downside price breakout objective for the bears is closingprices below solid support at the March low of $16.10. First resistance is seenat $16.75 and then at $17.00. Next support is seen at today’s low of $16.605and then at $16.50. Wyckoff's Market Rating: 5.0.
MayN.Y. copper closed down 215 points at 311.35 cents today. Prices closed nearmid-range. The copper bulls have the slight overall near-term technicaladvantage. A four-week-old uptrend is in place on the daily bar chart. Copperbulls' next upside price objective is pushing and closing prices above solidtechnical resistance at 320.00 cents. The next downside price objective for thebears is closing prices below solid technical support at 300.00 cents. Firstresistance is seen at 315.00 cents and then at today’s high of 316.15 cents.First support is seen at 310.00 cents and then at today’s low of 307.80 cents.Wyckoff's Market Rating: 5.5.
By Jim WyckoffFor Kitco News
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jwyckoff@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.