Gold, Silver Slump To 12-Mo. Lows Amid Resurgent Greenback

(Kitco News) - Gold and silver prices aremoderately lower in early U.S. trading Friday. Both metals have just dropped tofresh 12-month lows. A rally in world stock markets, including major U.S. stockindexes hitting multi-month highs overnight, show there is little risk aversionin the marketplace at present to help out the safe-haven metals. A solidrebound in the U.S. dollar index this week is also a significantly bearishforce working against the precious metals. Augustgold futures were last down $8.60an ounce at $1,238.00. July Comex silver was last down $0.182 at $15.795an ounce.

Thegreenback bulls have had a very good week. The U.S. dollar index is now not farbelow its recent 12-month high. A U.S. consumer inflation reading Thursday thathit a six-year high (CPI at 2.9% annually) has bolstered notions the FederalReserve will raise interest rates a total of four times this year.

Inovernight news, the British pound is under some pressure versus the U.S. dollartoday as President Trump has criticized U.K. Prime Minister May for her Brexitstrategy. May is perceived to be in a very weak position in her leadership, atpresent.

Theother key “outside market” today finds Nymex crude oil prices slightly weakeron follow-through selling from strong losses posted Wednesday, and are trading justabove $70.00 a barrel. A lower close in the Nymex oil futures market todaywould be a technical clue that crude oil has put in at least a near-term top,if not a major top. Such would also be a bearish development for the metals andthe raw commodity sector, in general.

U.S.economic data due for release Friday includes import and export prices and theUniversity of Michigan consumer sentiment survey.

Technically,gold bears have the solid overall near-term technical advantage amid a pricedowntrend on the daily bar chart. Gold bulls' next upside near-term pricebreakout objective is to produce a close in August futures above solidresistance at $1,280.00. Bears' next near-term downside price breakoutobjective is pushing prices below solid technical support at $1,200.00. Firstresistance is seen at the overnight high of $1,248.50 and then at $1,250.00.First support is seen at today’s low of $1,236.20 and then at $1,230.00.Wyckoff's Market Rating: 2.0

Septembersilver futures bears have the firm overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $16.50 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at the Decemberlow of $15.50. First resistance is seen at $16.00 and then at this week’s highof $16.26. Next support is seen at today’s low of $15.70 and then at $15.50.Wyckoff's Market Rating: 2.0.

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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