Comex gold futures prices ended the U.S. day session solidly lower Monday and hit a fresh 4.5-month low. Most markets were under selling pressure on keener risk aversion due to several factors, but namely the heightened European Union debt and financial crisis. June gold last traded down $20.30 at $1,563.70 an ounce. Spot gold was last quoted down $16.40 an ounce at $1,564.50. July Comex silver last traded down $0.485 at $28.405 an ounce.
The market place got a shaky start to the new trading week Monday. The European Union debt crisis has intensified. More weak EU economic data was issued Monday. There is continued Greek political disarray as no coalition government has formed and fresh elections are likely. There were rising Italian and Spanish bond yields Monday, with Spanish yields above the critical 6% level. And, a major region in German saw its electorate over the weekend rebuke German leader Merkel’s austerity policies. The EU debt situation shared the spotlight with China Monday as Chinese monetary authorities loosened monetary policy over the weekend by reducing reserve requirement ratios on domestic bank reserves. The move follows recent weaker-than-expected Chinese economic data. And there is still fallout from the news late last week when JP Morgan announced a $2 billion or more trading loss in just a few weeks’ time. All this has created keener trader/investor uncertainty in the market place, which is bullish for the U.S. dollar index, U.S. Treasuries and German bonds—and bearish for raw commodity markets. This week looks to be an extra important trading week for many markets, including the precious metals.
The U.S. dollar index traded higher Monday and hit a fresh two-month high overnight. The greenback has benefited recently on fresh safe-haven demand due to the EU situation and the recent JP Morgan news. Crude oil futures prices were solidly lower Monday and hit another 4.5-month low of $93.65 overnight. Crude oil remains in a bearish fundamental and technical posture. These two key markets were in a bearish posture for the precious metals Monday and will continue to have a daily influence on the precious metals markets.
The gold market bulls are growing more frustrated as the EU debt crisis escalates but any fresh safe-haven demand for the yellow metal cannot overcome the stronger selling pressure. The bulls are also wondering when stronger bargain-hunting and safe-haven demand will surface at the lower price levels, to revive gold and keep the longer-term price uptrend on the longer-term charts in place.
The London P.M. gold fixing was $1,558.50 versus the previous London P.M. fixing of $1,563.00.
Technically, June gold futures prices closed nearer the session low Monday. Serious near-term chart damage has been inflicted recently. Gold bears have the solid near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,600.00. Bears' next near-term downside price objective is closing prices below technical support at the December low of $1,528.60. First resistance is seen at $1,575.00 and then at Monday’s high of $1,585.80. First support is seen at Monday’s low of $1,555.00 and then at $1,550.00. Wyckoff's Market Rating: 3.0.
July silver futures prices closed nearer the session low Monday and hit a fresh 4.5-month low. Silver prices are in a 2.5-month-old downtrend on the daily bar chart. The silver bears have the solid near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above psychological resistance at $30.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $26.50. First resistance is seen at Monday’s high of $29.00 and then at $29.50. Next support is seen at Monday’s low of at $28.205 and then at $28.00. Wyckoff's Market Rating: 3.0.
July N.Y. copper closed down 1,025 points 354.55 cents Monday. Prices closed near the session low and hit a fresh four-month low. The key “outside markets” were in a bearish posture for copper Monday, as the U.S. dollar index was higher and the crude oil market was solidly lower. Copper bears now have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 371.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at 357.75 cents and then at 360.00 cents. First support is seen at Monday’s low of 354.25 cents and then at 352.50 cents. Wyckoff's Market Rating: 4.0.