Short-covering in gold silver; bulls have more heavy lifting ahead

Gold and silver prices are higher, with silver sharply up, in midday U.S. trading Monday. Gold hit a nearly four-month low overnight. Short covering by the shorter-term futures traders was featured on this first day of the trading week. A weaker U.S. dollar index, higher crude oil prices and lower bond yields on this day also worked in favor of the metals markets bulls. However, the bulls need to put together some solid price-gain days to begin to repair recent chart damage. June gold futures were last up $4.70 at $1,813.10. July Comex silver futures were last up $0.479 at $21.48 an ounce.

Global stock markets were mixed but mostly lower overnight. U.S. stock indexes are mixed at midday. The S&P 500 stock index last week had its worse week in 11 years. The U.S. index is now flirting with being in a bear market that is defined by the indexes being down 20% from its recent high. The Russia-Ukraine war, Covid lockdowns in China and inflation fears are hitting the equities hard. The risk aversion seen in the marketplace recently is bullish for gold and silver, but bulls have been perplexed their metals have not seen much upside price performance by such.

U.S. dollar could dominate gold price through the summer - analysts

The key outside markets today see Nymex crude oil futures prices higher, at a two-month high and trading around $112.50 a barrel. Meantime, the U.S. dollar index is lower in midday trading. The yield on the 10-year U.S. Treasury note is fetching 2.86%.

Technically, June gold futures prices hit a nearly four-month low early on today. A nine-week-old price downtrend is in place on the daily bar chart. Bears have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,875.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at Friday’s high of $1,827.60 and then at $1,850.00. First support is seen at $1,800.00 and then at today’s low of $1,785.00. Wyckoff's Market Rating: 3.0

July silver futures saw short covering featured. Prices hit a 22-month low Friday. A steep price downtrend is in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at $21.625 and then at $22.00. Next support is seen at $21.00 and then at today’s low of $20.835. Wyckoff's Market Rating: 1.5.

July N.Y. copper closed up 115 points at 418.65 cents today. Prices closed nearer the session high today. The copper bears have the solid overall near-term technical advantage. A steep price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 440.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at today’s high of 420.60 cents 425.00 cents. First support is seen at today’s low of 413.35 cents and then at 410.00 cents. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips