Gold sees mild profit taking, silver up a bit
Gold prices are slightly weaker and silver prices modestly up near midday Wednesday. Trading has been choppy and two-sided for both metals so far today, after they hit three-week highs overnight. Modest profit-taking from the shorter-term futures traders is featured at mid-week. June gold was last down $20.60 at $4,830.00. May silver prices were up $0.402 at $79.99.
Gold and silver market bulls did get some price-friendly news today. Hedge funds are increasingly downbeat on the U.S. dollar, Bloomberg reports, as the prospect of renewed U.S.-Iran talks and a possible peace deal have seen the greenback unwind almost all its war-driven strength. The dollar’s turnaround has been swift, with Bloomberg’s dollar index dropping 1.9% in April after jumping 2.4% in March, as the U.S. and Iran started to discuss a resolution to the conflict. “The path to a weaker dollar is widening, with analysts expecting medium-term dollar weakness to be more concentrated versus major peers, such as the Euro, yen, and Swiss franc,” said the report. Meantime, the elevated dollar signals long-term correction risks, according to Harvard University professor Kenneth Rogoff. “The dollar is probably at least still 20% overvalued,” he said. “Every previous episode where the dollar — or frankly any major currency — has been this overvalued, it tends to come down over, say, a five- or six-year period,” he said.
The key outside markets see Nymex WTI crude oil prices higher and trading around $92.50 a barrel. The U.S. dollar index is a bit weaker. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.25 percent.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, June gold futures bulls’ next upside price objective is to produce a close above solid resistance at $5,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,500.00. First resistance is seen at today’s high of $4,895.40 and then at $4,950.00. First support is seen at $4,800.00 and then at $4,750.00. Wyckoff's Market Rating: 6.5.
May silver futures bulls see their next upside price objective for the bulls is closing prices above solid technical resistance at $85.00. The next downside price objective for the bears is closing prices below solid support at $70.00. First resistance is seen at today’s high of $81.155 and then at $82.50. Next support is seen at $77.00 and then at $75.00. Wyckoff's Market Rating: 6.5.
