Gold Sinks To 5-Week Low As U.S. Dollar Stronger

(Kitco News) - Gold pricesare moderately down and have dropped to a five-week low in early U.S. trading Monday.Silver prices are also weaker and hit a three-week low overnight. The recentsolid rally in the U.S. dollar index continues to curtail buying interest inthe precious metals markets. June Comex gold futures were last down $9.80 anounce at $1,313.70. May Comex silver was last down $0.141 at $16.265 an ounce.

Alsoworking against the safe-haven metals are upbeat trader and investor riskattitudes in the world marketplace. It appears North Korea has softened itsresolve on its nuclear ambitions, while the U.S. and China are holdinghigh-level trade talks this week, which could avoid a major trade war.

Worldstock markets were mostly higher overnight. U.S. stock indexes are pointedtoward higher openings when the New York day session begins. Solid corporateearnings reports released recently have supported world stock markets.

Twoimportant meetings will have the attention of the world marketplace this week:the Federal Reserve’s Open Market Committee (FOMC) meeting that begins Tuesday,and the above-mentioned U.S. high-level trade delegation that will be in Chinalater this week. And then on Friday is the U.S. employment report from theLabor Department-arguably the most important U.S. data point of the month.

Thekey “outside markets” on Monday morning see the U.S. dollar index trading firmer.Prices last week hit a 3.5-month high. Meantime, Nymex crude oil prices arelower and trading just above $67.00 a barrel. The U.S. oil rig count hit athree-year high last week, which is pressing oil prices lower today.

U.S.economic data due for release Monday includes personal income and outlays, theISM Chicago business survey, pending home sales and the Texas manufacturingoutlook survey.

Technically,June gold bulls still have the slight overall near-term technical advantage, buthave faded badly recently and need to show fresh power soon to avoid moreserious chart damage. Gold bulls' next upside near-term price breakoutobjective is to produce a close above solid technical resistance at last week’shigh of $1,337.60. Bears' next near-term downside price breakout objective ispushing prices below solid technical support at the March low of $1,309.30.First resistance is seen at $1,320.00 and then at today’s high of $1,325.90.First support is seen at today’s low of $1,312.40 and then at $1,309.30.Wyckoff's Market Rating: 5.5

Maysilver 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 the March lowof $16.10. First resistance is seen at today’s high of $16.485 and then at $16.58.Next support is seen at $16.15 and then at $16.10. Wyckoff's Market Rating: 4.0.

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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