Comex gold futures ended the U.S. day session sharply lower, hit a three-week low and closed below the key $1,400.00 level. A stronger U.S. dollar index and weaker crude oil prices combined with a weak technical posture to pressure gold and silver prices.
June Comex gold last traded down $27.80 at $1,396.70 an ounce. Spot gold was last quoted down $27.60 at $1,398.75. July Comex silver last traded down $0.689 at $22.69 an ounce.
Gold and silver saw intensified selling pressure in late-morning trading Wednesday to extend earlier losses. Sell stop orders were triggered to push June gold futures prices below key technical and psychological support at the $1,400.00 level. June gold traded down to a low of $1,389.00 on the day. The close below $1,400.00 now opens the door to a challenge of major chart support at the April spike low of $1,321.50 in June futures.
The surging U.S. dollar on the foreign exchange market and the weak raw commodity sector, in general, continue to be a bearish weight on the gold and silver markets. The U.S. dollar index hit a 9.5-month high Wednesday. A news report Wednesday said a survey of investment fund managers showed the vast majority of those money managers are shunning the raw commodity sector as an investment asset.
Reports of disappointing demand for physical gold at the peak demand season in India are also bearish for the yellow metal. Spring weddings and a holiday this week in India have seen gold demand in that nation increase somewhat, but not as much as many analysts had expected.
In other overnight news, the Euro currency fell on news of a weaker-than-expected European Union gross domestic product figure. For the sixth quarter in a row, EU GDP came in at negative growth. First-quarter EU GDP came in at minus 0.2 per cent, compared with the fourth-quarter of last year. The GDP data from the EU suggests the European Central Bank will keep its pedal to the metal on its aggressive easing of its monetary policy.
The London P.M. gold fixing is $1,410.00 versus the previous P.M. fixing of $1,433.75.
Technically, June gold futures prices closed nearer the session low and hit a fresh three-week low Wednesday. The gold bears are in near-term technical control and gained some downside momentum with Wednesday's close below the key psychological level of $1,400.00.
Prices are in a seven-month-old downtrend on the daily bar chart. The gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,321.50. First resistance is seen at $1,400.00 and then at $1,410.00. First support is seen at Wednesday's low of $1,389.00 and then at $1,380.00.
July silver futures prices closed nearer the session low, hit a fresh three-week low and closed at a fresh 31-month low close Wednesday. Silver bears are in firm 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 this week's high of $23.84 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of $21.12. First resistance is seen at $23.00 and then at Wednesday's high of $23.45. Next support is seen at Wednesday's low of $22.455 and then at $22.00.
May New York copper closed down 235 points at 3.26 cents per pound Wednesday. Prices closed near mid-range. The key "outside markets" were bearish for copper again Wednesday as the U.S. dollar index was higher and crude oil prices were weaker. Copper bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 339.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 320.00 cents. First resistance is seen at today's high of 328.65 cents and then at 330.00 cents. First support is seen at 325.00 cents and then at Wednesday's low of 323.55 cents.