Morning Gold: Gold Decreasing Near a 2.5-Year Low


(Kitco News)- On Monday, in early U.S. trading, gold prices are slightly lower as prices traded wasn’t far-off last week’s 2.5-year low of $1,268.70, basis August Comex futures. Freestanding market bears are working against the precious metals to begin the new trading week, by means of the U.S. dollar index increased, and the raw commodity market sector is below common selling force. The gold market bears continuing in a strong technical control of their markets. Spot gold was last quoted down $14.70 at $1,284.40. Comex August gold last traded down $8.90 at $1,283.10 an ounce.

On Monday, Asian and European stock markets were lower. U.S. equities seem to be prepared to take an additional downside hit Monday. In the world’s second largest economy, China, there are concerns around its economic health and a possible credit critical point. A report during the weekend by a main Chinese newspaper said that China’s monetary authorities wouldn’t make any actions to ease the constricted credit condition at this time.

Monday morning, the U.S. dollar index, increased on some observed safe-haven buying interest. Gold to this point has experienced a exceptionally limited safe-haven investment demand, as a result of the risk aversion in the market, and as an alternative it proceeded as a raw commodity risk asset.

The time being, note yields and U.S. Treasury bond are continuing to increase, with the 10-year note reaching on Monday 2.63%, experiencing a two-year high. On strong economic data coming out of Germany, the Euro currency was steady. Yet, other currencies as the Australian dollar and Canadian dollar were in stress.

On Monday, the U.S. economic data to be released contains the Texas manufacturing outlook survey and the Chicago Fed national activity index.

The London previous P.M. fixing of $1,295.35 and the A.M. gold fixing is $1,283.25.

Technically speaking, the door is wide open for more technical selling pressure on gold in the near term. The next main, longer-term downside price targets are $1,227, and then at $1,100 and then at $1,027 for nearby Comex futures. August gold futures prices are in an 8-month-old downtrend on the daily bar chart. The gold market bears are in strong near-term technical command. Bears’ next near-term downside breakout price objective is closing prices under solid technical support at $1,250.00. The gold bulls’ next upside near-term price objective is to produce a close over solid technical resistance at the May low of $1,338.00. The first resistance is sighted at the overnight high of $1,300.70 and then at the April low of $1,323.00, as for the first support is sighted at last week’s low of $1,268.70 and then at $1,250.00.