Gold Price Sees Short-Covering, Bargain Hunting Rebound Monday

San Francisco (Jun 8)  Gold prices ended a quieter U.S. day session with modest gains Monday, on some short covering in the futures market and some bargain hunting in the cash, after prices dropped to a 2.5-month low last Friday. The bearish chart postures for both gold and silver markets are still keeping buyers very tentative. August Comex gold was last up $5.20 at $1,173.30 an ounce. July Comex silver was last down $0.034 at $15.96 an ounce.

The U.S. dollar index traded solidly lower Monday, which was also a bullish “outside market” force working in favor of the precious metals bulls.

In overnight news, there was another downbeat economic report coming out of China Monday. China’s overall exports were down 2.5% in May, year-on-year, while imports were down 17.6% during the same period. The report helped to put some selling pressure into the other outside market: crude oil. China is the world’s largest importer of raw commodities. This news was a negative for the metals that did limit gains in gold and silver today.

Reports overnight said Greece is awaiting EU/IMF creditors’ response to its draft proposal on Greece’s debt restructuring. June 30 is now seen as the latest deadline for a deal to be reached. This situation is a classic “kick the can down the road” scenario that appears to be delaying the obvious: a payment default by Greece.

The London P.M. fix is $1,172.80 versus the previous A.M. fixing of $1,173.40.

Technically, August gold futures prices closed near mid-range after hitting a 10-week low Friday. Gold bears have the solid overall near-term technical advantage. A three-week-old downtrend is in place 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 March low of $1,143.80. First resistance is seen at today’s high of $1,177.10 and then at $1,185.00. First support is seen at last week’s low of $1,152.10 and then at $1,150.00.

July silver futures prices closed nearer the session low today and hit a five-week low. Silver bears have the solid near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.80 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $15.595. First resistance is seen at today’s high of $16.11 and then at $16.25. Next support is seen at today’s low of $15.88 and then at $15.75.

July N.Y. copper closed up 50 points at 269.75 cents today. Prices closed nearer the session high and saw short covering. Prices Friday hit a six-week low. Copper bears have the near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 283.00 cents.

Source: KitcoNews