8:52 AM
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By Jim Wyckoff of Kitco News
MAKE MONEY BLOG$~Comex gold futures prices are trading slightly lower Monday morning. Investor risk appetite has shrunk just a bit to start the new trading week and the last trading day of the month
, as European Union debt and financial worries continue to creep back into the focus on the market place. Trading was a bit quieter overnight due to Chinese and Japanese holidays. June gold last traded down $1.90 at $1,662.90 an ounce. Spot gold was last quoted down $1.10 an ounce at $1,662.25. May Comex silver last traded down $0.297 at $31.05 an ounce.
More weak economic data coming out of the European Union overnight pressured the European stock markets, and that weakness has spilled over into U.S. trading. Also on Monday the Standard & Poors credit agency downgraded several Spanish banks’ credit ratings. There are bond auctions in Spain and France this week that will again be closely scrutinized by the market place.
The U.S. dollar index is trading firmer early Monday but did hit a fresh two-month low overnight. Dollar index bulls are fading and that has been somewhat encouraging to the precious metals bulls. Meantime, crude oil futures prices are trading weaker Monday morning. The daily posture of these two key “outside markets” favors the precious metals bearish camp so far Monday.
Still-weak demand for physical gold from India, the top world gold consumer, has been limiting the upside for the yellow metal recently.
U.S. economic data due for release Monday includes the Chicago Fed Midwest manufacturing index, personal income and outlays, the ISM Chicago business survey and the Texas manufacturing survey.
The London A.M. gold fixing is $1,662.50 versus the previous London P.M. fixing of $1,663.50.
Technically, June gold futures bulls had a good finish to trading last week as prices Friday hit a fresh two-week high and closed at a bullish weekly high close. The bears still have the slight near-term technical advantage, however. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the April high of $1,685.40. Bears’ next near-term downside price objective is closing prices below technical support at the April low of $1,613.00. First resistance is seen at Friday’s high of $1,668.40 and then at $1,675.00. First support is seen at Friday’s low of $1,651.10 and then at $1,642.50.
May silver futures prices are still in a two-month-old downtrend on the daily bar chart. The silver bears have the near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $32.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $29.00. First resistance is seen at Friday’s high of $31.395 and then at last week’s high of $31.685. Next support is seen at Friday’s low of $30.885 and then at $30.50.
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source: forbes.com
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