Tuesday May 7, 2013 2:26 PM
(Kitco News) - Comex gold futures prices ended the U.S. day session solidly lower Tuesday on technical chart consolidation and news of fresh outflows of investor money from gold-backed exchange traded funds. June Comex gold last traded down $21.30 at $1,446.70 an ounce. Spot gold was last quoted down $22.70 at $1,448.00. July Comex silver last traded down $0.15 at $23.805 an ounce.
The gold futures market Tuesday saw intensified selling pressure emerge in late-morning trading when reports showed outflows of investor monies from exchange traded funds (ETFs) continues. ETF Securities Tuesday reported its biggest outflow of investor money in over 3.5 years occurred last week for its gold-backed commodities fund. Barron's reported Tuesday its sources said the Paulson Gold Fund lost over 25% in April and is now down 47% on the year. This fresh, bearish ETF news comes on top of recent reports that showed investor exodus in gold-backed ETFs during the first quarter of this year and into April.
In overnight news, Australia’s central bank cuts its key interest rate to a record low of 2.75% in an effort to keep its economy afloat and to weaken the Australian dollar. Yet another major central bank is working to debase its currency. Such is a bullish underlying factor for hard assets and the precious metals markets--and especially gold, which many investors view as a currency in itself.
In Asian trading the Japanese stock market hit a five-year high on the first trading day after the Golden Week holiday break. There will be some key economic data from China released on Wednesday and Thursday. A Dow Jones Newswires report Tuesday highlighted that falling factory inventories in China are a strong signal the world’s second-largest economy is sputtering a bit.
The U.S. dollar index was weaker Tuesday afternoon, but up from its daily low. Meantime, Nymex crude oil futures prices were weaker Tuesday, and that was a mildly bearish outside market force for the precious metals. The crude oil bulls still have some upside near-term technical momentum as prices hit a four-week high on Monday.
The London P.M. gold fixing is $1,444.25 versus the previous P.M. fixing of $1,469.25.
Technically, June gold futures prices closed nearer the session low Tuesday. The bulls need to show fresh power soon to keep the bears from mounting another big offensive to the downside. Gold prices are in a seven-month-old downtrend on the daily bar chart and the bears have the overall technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,500.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,425.00. First resistance is seen at $1,460.00 and then at Tuesday’s high of $1,470.00. First support is seen at last week’s low of $1,439.70 and then at $1,430.00. Wyckoff’s Market Rating: 3.0
July silver futures prices closed nearer the session high Tuesday. Silver bears are in overall technical control. Prices are in a seven-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $23.00. First resistance is seen at Tuesday’s high of $24.04 and then at this week’s high of $24.42. Next support is seen at Tuesday’s low of $23.40 and then at last week’s low of $23.21. Wyckoff's Market Rating: 3.0.
May N.Y. copper closed down 90 points at 330.10 cents Tuesday. Prices closed nearer the session high. Copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 345.25 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 315.00 cents. First resistance is seen at Monday’s high of 332.40 cents and then at 335.00 cents. First support is seen at Tuesday’s low of 326.50 cents and then at 325.00 cents. Wyckoff's Market Rating: 3.0.
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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
