Gold price slightly down as bulls work to stabilize market

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(Kitco News) - Gold prices are a bit weaker in early U.S. Trading Tuesday as the bulls are trying to stop the bleeding in a down-trending market that Monday hit a 2.5-month low. The precious metals are have been punished recently by a strong U.S. dollar and rising bond yields. Still-elevated risk aversion in the general marketplace is presently not helping out the safe-haven metals bulls. June gold futures were last down $0.30 at $1,863.30 and May Comex silver was last up $0.026 at $22.57 an ounce.

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The Nasdaq and S&P stock indexes are near their 12-month lows scored Monday. A brief “flash crash” occurred in European stock markets Monday, reportedly on an erroneous trade entered by a Citigroup in Sweden.

In other overnight news, the Euro zone producer price index for March was up 5.3% from February and up 36.8%, year-on-year. The mammoth rise was mostly due to soaring energy costs, but still, excluding energy the PPI was up 13.6%, year-on-year.

Australia’s central bank overnight raised its key interest rates by 0.25%–the first rate hike by the Reserve Bank of Australia in a decade.

The economic data point of the week in the U.S. Federal Reserve Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the Fed will raise the key U.S. interest rate by 0.5%, amid the highest inflation levels in 40 years. The monthly U.S. jobs report is also due out Friday morning.

The key outside markets today sees Nymex crude oil futures prices lower and trading around $103.75 a barrel. The U.S. dollar index is weaker in early trading. The yield on the 10-year U.S. Treasury note is presently fetching 2.967%. The 10-year yield early this week hit a 3.5-year high just above 3%. The yield on the benchmark German 10-year bond (bund) rose above 1% for the first time since 2015.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, domestic auto industry sales and manufacturers’ shipments and inventories.

Technically, the June gold futures bears have the overall near-term technical advantage. A downtrend line is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,875.00 and then at $1,883.00. First support is seen at the overnight low of $1,849.70 and then at $1,835.00. Wyckoff’s Market Rating: 3.5

May silver futures bears have the solid overall near-term technical advantage. Prices are trending sharply down on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at Monday’s high of $22.83 and then at $23.00. Next support is seen at the overnight low of $22.495 and then at Monday’s low of $22.12. Wyckoff’s Market Rating: 2.5.