(Kitco News) – Gold prices lost overnight gains and are trading sharply down in midday U.S. dealings Monday, after scoring decent gains overnight and hitting a five-week high. Silver is higher at midday but well down from overnight highs that saw prices hit an 11-week high. The spot gold market saw prices reach a seven-year high overnight. The precious metals lost altitude in early U.S. trading when U.S. stock indexes pushed solidly higher on a very positive report on the drug firm Moderna’s effort to find a vaccine for Covid-19. June gold futures were last down $21.80 an ounce at $1,734.50. July Comex silver prices were last up $0.345 at $17.405 an ounce.
Global stock markets were mostly firmer in overnight trading. As the world’s major economies have started to reopen, there is some encouraging news on the Covid-19 pandemic front, other than the Moderna vaccine news. Reports say the rate of increase of new infections is at the slowest pace in months.
Federal Reserve Chairman Jerome Powell said over the weekend the U.S. economy could recover steadily through the second half of the year, under the condition that there is no second wave of Covid-19. Powell said the Fed still has more ammunition to stimulate the U.S. economy, if it’s needed, adding there needs to be a vaccine for the economy to fully recover and that may be more than a year away.
In other overnight news, Japan, the world’s third-largest economy, sank into recession in the first quarter, as its gross domestic product contracted by 3.4% in the period.
The important outside markets see Nymex crude oil futures sharply higher early today, at a five-week high, and trading around $32.50 a barrel in the June contract, which expires late this week. Many were predicting the June contract would expire the way the May contract did—in negative territory. The U.S. dollar index is sharply lower at midday today. These two markets were also in a bullish posture for the precious metals today.
Technically, June gold futures scored a bearish “outside day” down on the daily bar chart today. The bulls still have the solid overall near-term technical advantage. Gold bulls’ next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears’ next near-term downside price objective is pushing prices below solid technical support at $1,666.20. First resistance is seen at $1,750.00 and then at today’s high of $1,775.80. First support is seen at $1,725.00 and then at $1,716.00. Wyckoff’s Market Rating: 7.5
July silver futures silver bulls have the solid overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $17.75 and then at $18.00. Next support is seen at today’s low of $17.125 and then at $17.00. Wyckoff’s Market Rating: 7.5.
July N.Y. copper closed up 670 points at 239.75 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 250.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 225.00 cents. First resistance is seen at today’s high of 240.70 cents and then at the May high of 243.00 cents. First support is seen at today’s low of 233.40 cents and then at 230.00 cents.