Price pullback for gold after Monday's good gains

May 4, 2021

New York (May 4)  Gold prices are weaker in early U.S. trading Tuesday, on a routine downside correction and some chart consolidation following decent gains posted Monday, which did provide the bulls with some fresh technical strength. Bearish for the precious metals on this day is a rebound in the U.S. dollar index. June gold futures were last down $7.00 at $1,784.80 and July Comex silver was last down $0.035 at $26.925 an ounce.

Global stock markets were mostly flat overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. With no major geopolitical fires burning at present and Covid-19 mostly tamped down in most major economies, focus of traders and investors is on mostly upbeat quarterly corporate earnings reports and the still-easy monetary policies of the major central banks of the world. Those are bullish elements for the equities markets. So far, the markets are not paying much attention to the Covid crisis in India that continues to grow in magnitude.

In overnight news, Australia’s central bank left its monetary policy unchanged at its regular meeting Tuesday. The Royal Bank of Australia said it expects no rise in its interest rates until at least 2024. The RBA did not portray inflation as becoming problematic.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher, hit a six-week high, and  are trading around $65.60 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.621%. For perspective, the German 10-year bund is yielding -0.192% and the U.K. gilt is at 0.837%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the international trade report, the IBD/TIPP economic optimism index, and manufacturers’ shipments and inventories.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have regained the overall near-term technical advantage and have restarted a price uptrend on the daily bar chart, with Monday’s good gains. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,754.60. First resistance is seen at the overnight high of $1,793.60 and then at $1,800.00. First support is seen at this week’s low of $1,765.60 and then at last week’s low of $1,754.60.

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