(Kitco News) – Gold prices are modestly down and hit a four-week low in early U.S. trading Monday. The recent sell off in the U.S. dollar index appears to be stabilizing, which is a negative for the precious metals markets. The daily charts for gold and silver have also turned more bearish recently, which is also inspiring the technically biased sellers. August Comex gold was last down $2.00 an ounce at $1,254.50. July Comex silver was last down $0.006 at $16.66 an ounce.
World stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins. Many world stock markets have been in rally mode, with some at or near record or for-the-move highs. That’s also a bearish element for the competing asset metals class.
Ideas of a more hawkish U.S. Federal Reserve after last week’s FOMC meeting are also negative for the precious metals and for the raw commodity sector.
In overnight news, there was another potential terror attack in London Sunday when a car rammed a crowd of people and killed at least one. The markets were not impacted by the event.
The key “outside markets” on Monday morning see Nymex crude oil futures prices slightly higher on short covering following recent selling pressure. The oil market bears still have the solid overall near-term technical advantage as prices are trading bear $45.00 a barrel. There continue to be notions of a worldwide oil supply glut that will continue to depress prices for some time to come.
Meantime, the U.S. dollar index is near steady early today. The greenback bears still hold the overall near-term technical advantage as prices last week hit a seven-month low.
There is no major U.S. economic data due for release Monday, and it will be a quieter week, overall, for U.S. reports.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
Technically, August goldd futures bulls and bears are on a level overall near-term technical playing field, but the bears have the momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,284.20. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,225.00. First resistance is seen at the overnight high of $1,257.30 and then at $1,268.50. First support is seen at the overnight low of $1,250.50 and then at $1,240.00. Wyckoff’s Market Rating: 5.0
July silver bears have the overall near-term technical advantage as prices hit a four-week low overnight. The next upside price breakout objective is closing futures prices above solid technical resistance at the June high of $17.745 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.06. First resistance is seen at $16.80 and then at $17.00. Next support is seen at the overnight low of $16.57 and then at $16.50. Wyckoff’s Market Rating: 3.0.