Price Weakness in Gold, Silver, But Wobbly U.S. Equities Limit Losses

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May 19, 2021 10:58 NY TimeKitco 10AM Silver Fix

(Kitco News, Wed. May 19th,2021) – Gold and silver prices are lower in early morning U.S. trading Wednesday, on routine downside corrections after hitting 3.5-month highs on Tuesday. The precious metals are up from their session lows as the U.S. stock market is selling off in pre-market trading. Don’t be surprised to see the gold and silver market bulls step in to buy the dips and do some bargain hunting. June gold futures were last down $3.50 at $1,864.70 and July Comex silver was last down $0.543 at $27.79 an ounce. 

Global stock markets were mixed but mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. It’s a risk-off trader and investor mentality at mid-week as the marketplace awaits the U.S. data point of the day Wednesday–the minutes from the last meeting (April 27-28) of the Federal Reserve’s Open Market Committee (FOMC), due out at 2:00 p.m. EDT. Traders and investors will be looking for further clues on the path of the U.S. economic recovery and on the inflation front.

In overnight news, Bitcoin continues to crumble at mid-week, falling below $40,000 amid reports of China cracking down on crypto currencies’ use for payments and as Elon Musk has made disparaging remarks about cryptos recently. Bitcoin is down around 40% after hitting a high above $65,000 in mid-April. Such reminds of the phrase, “easy come, easy go.” The eroding crypto currency market recently has likely given a boost to the precious metals markets and also gives the veteran metals bulls some reassurances that their stores of value that have been used by humankind for thousands of years have not been summarily displaced by computer-software generated crypto currencies that have been in place around a dozen years.

The key outside markets today see the U.S. dollar index higher on a rebound from hitting a nearly three-month low Tuesday. Meantime, Nymex crude oil prices are lower on a corrective pullback after hitting a two-month high Tuesday, and are trading around $64.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.66%.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy stocks report.

Technically, June gold futures bulls have the firm overall near-term technical advantage amid a seven-week-old price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,808.40. First resistance is seen at this week’s high of $1,875.90 and then at $1,881.00. First support is seen at the overnight low of $1,852.20 and then at $1,850.00.

The silver bulls have the firm overall near-term technical advantage amid a seven-week-old price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $30.00 an ounce. The next downside price objective for the bears is closing prices below solid support at last week’s low of $26.78. First resistance is seen at $28.00 and then at the overnight high of $28.34. Next support is seen at the overnight low of $27.425 and then at $27.00.

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com