Gold prices pull back as crude oil drops sharply
New York (Apr 27) Gold prices are modestly down in early U.S. trading Monday, on some chart consolidation and profit taking from the shorter-term futures traders. A big drop in crude oil prices overnight is also likely weighing on the precious metals markets a bit. June gold futures were last down $4.50 an ounce at $1,731.10. May Comex silver prices were last up $0.007 at $15.27 an ounce.
Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Highlighted to start the trading week is a big drop in crude oil prices, with Nymex crude trading down over $3.00 a barrel at $13.75. There is growing talk that Nymex crude prices will again fall into negative territory when the June contract nears expiration in late May. There is no place to store oil amid a glutted world market that has seen such a demand shock. Another U.S. oil producer, Diamond Offshore, filed for bankruptcy over the weekend.
Some regions in some countries, including the U.S., are starting to reopen from the Covid-19-induced lockdown. However, leading U.S. health officials over the weekend said social-distancing restrictions will likely remain in effect all summer.
Key central bank meetings occur this week, including those of the Federal Reserve (FOMC) and the European Central Bank. The Bank of Japan further eased its monetary policy on Monday. More key U.S. corporate earnings reports are due out this week.
The other important outside markets today see the U.S. dollar index solidly lower. The 10-year U.S. Treasury note yield is trading around 0.625% this morning.
U.S. economic reports due for release Monday include the Texas manufacturing outlook survey.
Live 24 hours gold chart [Kitco Inc.]
Technically, the gold bulls have the solid overall near-term technical advantage and have gained more power late this week. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,666.20.
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