Gold sees corrective bounce; bulls have more heavy lifting to do

(Kitco News) – Gold prices are a modestly higher in midday U.S. Trading Tuesday and are trading back above $1,900.00 as the bulls are trying to stop the bleeding after the recent downdraft that saw the market hit a nine-week low Monday. Short covering in the futures market and some perceived bargain hunting in the cash market were featured. Gold and silver bulls still have more work to do to break the near-term price downtrend lines that are now in place on the daily bar charts. June gold futures were last up $6.50 at $1,902.50 and May Comex silver was last down $0.125 at $23.545 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are solidly lower at midday, which is also supported for the safe-haven metals. Traders and investors are uneasy this week as China continues to lock down its major cities to prevent the spread of Covid. That’s leading many to think China’s economy, the second largest in the world, will suffer significantly this year, including more supply chain disruptions in Asia and around the globe. The Russia-Ukraine war has also heightened risk aversion in the marketplace the past several weeks. A top Russian government official today said the U.S. and Russia risk nuclear war. Inflation worries remain on the front burner of the global marketplace.

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The key outside markets see Nymex crude oil futures prices higher today and trading around $101.50 a barrel. Higher oil prices on this day are also friendly for the metals markets. The U.S. dollar index is higher and hit another two-year high early today. That’s a negative for the metals. The yield on the 10-year U.S. Treasury note is presently fetching 2.75%.

Technically, June gold futures see price downtrend line in place on the daily bar chart. Bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close above solid resistance at $1,950.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at today’s high of $1,912.20 and then at $1,925.00. First support is seen at this week’s low of $1,891.80 and then at $1,883.00.

May silver futures were poised to close at a nine-week low close today. A price downtrend is in place on the daily bar chart. The silver bears have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $24.00 and then at this week’s high of $24.24. Next support is seen at this week’s low of $23.42 and then at $23.00. Wyckoff’s Market Rating: 4.0.

May N.Y. copper closed down 50 points at 444.40 cents today. Prices closed nearer the session low today and closed at a 2.5-month low close. The copper bears have the overall near-term technical advantage. A price downtrend is in place on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 470.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 428.80 cents. First resistance is seen at 450.00 cents and then at today’s high of 452.45 cents. First support is seen at this week’s low of 440.65 cents and then at 435.00 cents.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com