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Gold Weaker As Technical Posture Deteriorates; Yellen Speech Awaited


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Gold Weaker As Technical Posture Deteriorates; Yellen Speech Awaited

Tuesday March 29, 2016 08:23

(Kitco News) - Gold prices are slightly lower in early U.S. trading Tuesday. The near-term technical posture for the yellow metal has become less bullish in recent sessions, which is inviting chart-based selling among the shorter-term futures traders. Less risk aversion in the world marketplace so far this week is also a bearish element for safe-haven gold. June Comex gold was last down $1.70 at $1,220.20 an ounce. May Comex silver was last down $0.003 at $15.16 an ounce.

Most major markets are quieter early this week and have not exhibited much price movement or volatility. An Egyptian airliner was hijacked overnight and forced to land in Cyprus. However, reports said the hijacker is not a terrorist but a distraught passenger who wants to talk to his girlfriend. The event has reportedly ended and had had no impact on the markets.

Asian stock markets were mixed overnight, while European stock markets were firmer. U.S. stock indexes are pointed toward slightly lower openings when the day session begins in New York.

Fed Chair Janet Yellen speaks to the Economic Club of New York later today. Traders and investors will be closely parsing her words for clues on the future direction of U.S. monetary policy. The latest talk in the marketplace is that the Fed could raise interest rates at its April FOMC meeting. Just a couple weeks ago that notion was not seen likely at all.

The key “outside markets” on Tuesday find the U.S. dollar index trading just slightly higher. Nymex crude oil futures prices are weaker and trading just below $39.00 a barrel. Oil prices have recently seen selling pressure. Oil bulls need to step up this week and show strength, in order to keep a six-week-old uptrend in place on the daily bar chart.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the S&P/Case-Shiller home price index and the consumer confidence index.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

Technically, June gold futures bulls still have the overall near-term technical advantage, but have faded badly recently and need to show fresh power soon. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at $1,226.00 and then at $1,230.00. First support is seen at last week’s low of $1,212.60 and then at Monday’s low of $1,207.70. Wyckoff’s Market Rating: 6.0

May silver bulls and bears are on a level overall near-term technical playing field amid choppy trading. Prices did hit a three-week low overnight. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at the March high of $16.17 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is at Monday’s high of $15.375 and then at $15.50. Next support is seen at $15.00 and then at $14.75. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.