P.M. Kitco Metals Roundup: Gold Hammered Down on Technical Selling, Bearish Outside Market Forces

(Kitco News) – Comex gold futures prices ended the U.S. day session sharply lower and hit a two-week low Tuesday. Renewed technical selling pressure surfaced as sell stop orders were triggered to accelerate the price down-move. The key “outside markets” turned more bearish for the precious metals on a daily basis Tuesday–a firmer U.S. dollar index and weaker crude oil prices. Also bearish for the raw commodity sector in general is the bull run in the U.S. stock market that saw the Dow and S&P indexes score new highs on Tuesday.  The keener investor interest in equities is pulling funds away from other asset classes, including the safe-haven gold market. June Comex gold last traded down $23.70 at $1,577.20 an ounce. Spot gold was last quoted down $22.20 at $1,577.75.  May Comex silver last traded down $0.644 at $27.30 an ounce.

U.S. economic data released Tuesday was about in line with market expectations and had little impact on the gold and silver markets. Traders and investors are looking ahead to Friday’s release of the U.S. employment situation report, which is arguably the most important U.S. economic report of the month. The consensus forecast calls for the key non-farm payrolls figure to have risen by 200,000 in March, with the overall unemployment rate unchanged from the previous month, at 7.7%.

In overnight news, there was more dour economic data coming out of the European Union Tuesday. The number of Euro zone unemployed workers rose to a record level in February, which underscores the bloc’s economic and financial problems. The overall Euro zone unemployment rate was 12.0% in February, which is unchanged from January. Meanwhile, Euro zone manufacturing data for March showed weakness at an accelerating rate. The Euro zone manufacturing PMI was reported at 46.8 in March from 47.9 in February. There were no new developments on the Cyprus banking crisis front. European stocks were modestly higher Tuesday. Still, the overall European Union political and economic situation remains a concern for the market place and continues to make traders and investors more risk-averse.

The London P.M. gold fix is $1,583.50 versus the previous P.M. fixing of $1,598.25.

The U.S. dollar index was firmer Tuesday. The U.S. dollar bulls hold the overall technical advantage, which is an underlying bearish factor for the gold and silver markets. Meantime, Nymex crude oil futures prices were slightly lower but did hit a six-week high on Monday. The crude oil bulls have the near-term technical advantage, which is an underlying bullish factor for the precious metals bulls. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.

Technically, June gold futures prices closed near the session low Tuesday and hit a fresh two-week low. The gold bears have the overall near-term technical advantage and gained fresh downside momentum Tuesday. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,600.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at the February low of $1,556.40. First resistance is seen at $1,585.00 and then at $1,590.00. First support is seen at Tuesday’s low of $1,574.00 and then at $1,570.00. Wyckoff’s Market Rating: 3.0

May silver futures prices closed nearer the session low again Tuesday and hit another fresh eight-month low. Silver bears have the solid overall near-term technical advantage and have gained fresh downside momentum this week. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $28.36 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $27.00. First resistance is seen at $27.50 and then at $27.81. Next support is seen at Tuesday’s low of $27.15 and then at $27.00. Wyckoff’s Market Rating: 2.0.

May N.Y. copper closed up 10 points at 337.55 cents Tuesday. Prices closed near mid-range and saw tepid short covering in a bear market. Copper bears still have the solid overall near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at last week’s high of 348.65 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August 2012 low of 332.00 cents. First resistance is seen at 340.00 cents and then at 342.50 cents. First support is seen at Tuesday’s low of 335.85 cents and then at this week’s low of 334.00 cents. Wyckoff’s Market Rating: 2.5.

Follow me on Twitter to immediately get the very latest market developments. If you are not on board, then you are not getting key analysis and perspective as fast or as often as you could! Follow me on Twitter to get my very timely intra-day and after-hours briefs on precious metals price action. The precious markets will remain very active. If you want market analysis fast, and in after-hours trading, then follow my up-to-the-second precious metals market perspective on Twitter. It’s free, too. My account is @jimwyckoff.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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