Gold Price Weaker as Charts Remain Firmly Bearish
New York (Jun 16) Gold prices are modestly lower in early U.S. trading Tuesday. Some safe-haven demand is limiting selling pressure in gold early this week. However, the solidly bearish near-term technical postures for gold and silver keep the path of least resistance for prices sideways to lower. August Comex gold was last down $3.60 at $1,182.20 an ounce. July Comex silver was last down $0.118 at $15.965 an ounce.
European stock markets were lower Tuesday, pressured in part by the Greece-EU debt negotiations that broke down Sunday. The IMF pulled out of the talks last week. Reports say Greece’s prime minister will try to deal directly with European Union leaders on the matter, starting with a Euro zone member meeting on Thursday. Greek bond yields have pushed higher and are now trading above 29% for the two-year note. This compares with the safe-haven German bund that now sees the 10-year issue trading at 0.78%. Some European analysts are saying a Greek debt deal must be reached by the end of June, or Greece will default on its debt obligations. The market place is coming to the realization Greece will probably default on its debt payments. This means that when the event actually occurs, markets price action will probably not be too volatile because the event has been factored in to markets’ price structures. Still, gold is seeing some mild safe-haven demand from the Greek debt crisis.
European stocks were also pressured Tuesday by a downbeat German ZEW economic expectations report. The ZEW reading came in at 31.5 in June versus 41.9 in May.
The Federal Reserve’s Open Market Committee (FOMC) begins its meeting on U.S. monetary policy Tuesday. The meeting ends Wednesday with an FOMC statement that includes new economic projections and will be followed by a press conference from Fed Chair Janet Yellen. Most market watchers do not expect the FOMC to raise interest rates at the June meeting, but instead do so in September or later. Still, the FOMC statement and Yellen press conference will be very closely scrutinized by the market place, and market price action could become very active in the immediate aftermath of the meeting.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, new residential construction, and the FOMC meeting begins.
The London A.M. gold fix is $1,182.10 versus the previous P.M. fix of $1,181.40.
Technically, August gold futures bears still have the firm overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the June low of $1,162.10. First resistance is seen at the overnight high of $1,187.40 and then at last week’s high of $1,191.80. First support is seen at $1,180.00 and then at Monday’s low of $1,171.90. Wyckoff’s Market Rating: 2.5
July silver futures bears have the firm near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.50 an ounce.
Source: KitcoNews
