Gold Ends Slightly Higher But Gives Up Most of Early Gains
New York (May 19) Gold prices ended the U.S. trading day slightly higher Monday. Early support from short covering and bargain hunting gave way to mild profit-taking pressure from the shorter-term traders as the session progressed. Firmer U.S. stock index prices Monday were also a mild negative for the gold market. June gold was last up $0.60 at $1,294.00 an ounce. Spot gold was last quoted up $1.30 at $1,294.50. July Comex silver last traded up $0.021 at $19.35 an ounce.
It was a quieter trading session Monday as there was no major U.S. economic data released.
Reports Monday said a government election result in India last Friday is a positive for the gold market as the more pro-business election winner could move to ease the current import restrictions on gold.
The European Central bank said Monday it is coordinating with Switzerland and Sweden on gold transactions but none have plans to sell significant amounts of gold. The coordination is in place to keep the gold market stable during any transactions that do occur. The ECB said gold remains “an important element of global monetary reserves.” The World Gold Council said Monday this news only underscores the importance of gold as an investment asset class.
European stock markets were weaker Monday, led by weakness in the Italian stock market. Spanish and Italian bond yields are again on the rise, which suggests renewed strains within the periphery countries of the European Union. These developments follow recent weak economic data coming out of the EU. The renewed worries about the overall health of the European Union’s collective economy have been part of the reason the U.S. Treasury market yields have dropped recently. The Euro currency has also slumped recently, while the U.S. dollar index has rallied. Anxiety in the market place regarding a renewed European Union sovereign debt crisis could also work to support the safe-haven gold market.
Asian equity markets were also weaker on some more downbeat economic news coming out of China. The real estate market in China is showing more signs of weakness, weekend reports out of China said.
There is no major U.S. economic data due for release Monday.
The London P.M. gold fixing today was $1,302.00 versus the previous P.M. fixing of $1,301.00.
Technically, June gold futures prices closed nearer the session low Monday. Trading has been choppy and sideways. Gold market bulls and bears are on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,315.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the May low of $1,272.00. First resistance is seen at $1,300.00 and then at Monday’s high of $1,305.70. First support is seen at Monday’s low of $1,289.50 and then at $1,285.00. Wyckoff’s Market Rating: 5.0
July silver futures prices closed nearer the session low Monday. The bears have the overall near-term technical advantage. However, recent choppy and sideways trading at lower price levels does suggest some “basing” that could mean a market low is in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $20.005 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $19.045. First resistance is seen at Monday’s high of $19.685 and then at $20.005. Next support is seen at Monday’s low of $19.255 and then at $19.045. Wyckoff's Market Rating: 3.0.
(Source: KITCO)
