(Kitco News) -Comex gold futures prices are trading solidly lower in early dealings Tuesday and hit a fresh six-week low overnight. The precious metals bulls are fading and need to step up and show fresh power soon to avoid serious near-term chart damage. The key “outside markets” are bearish for the precious metals markets early Tuesday, as the U.S. dollar index is higher and crude oil prices are lower. April gold last traded down $16.00 at $1,687.90 an ounce. Spot gold was last quoted down $19.90 an ounce at $1,687.00. May Comex silver last traded down $0.355 at $33.33 an ounce.
It’s a “risk-off” trading day in the market place Tuesday, and that’s a bearish factor for most raw commodity markets, including gold and silver. The European Union sovereign debt crisis is back on the front burner of the market place Tuesday. There are now concerns that the Greek debt swap arrangement agreed upon recently may not occur smoothly or voluntarily. Weak economic data coming out of the EU Monday has also raised worries about the EU slipping back into economic recession. The overall EU debt crisis remains a major underlying bullish factor for safe-haven gold.
The U.S. dollar index is trading higher Tuesday morning as the greenback bulls have regained some upside near-term technical momentum. That’s bearish for the precious metals. Meantime, Nymex crude oil futures prices are trading lower, which is also a negative factor for gold and silver. The U.S. dollar index and crude oil will remain two important outside market forces that will have a daily impact on the precious metals markets.
The raw commodity markets, including the precious metals, are also still digesting the somewhat bearish news Monday that China’s prime minister has lowered economic growth expectations for the commodity-consuming giant.
U.S. economic data due for release Tuesday is light and includes the weekly Johnson Redbook and Goldman Sachs retail sales reports.
The London A.M. gold fixing was $1,685.50 versus the previous London P.M. fixing of $1,705.00.
Technically, April gold futures prices hit a fresh six-week low overnight as prices may be seeing a bearish downside “breakout” from a bearish pennant pattern on the daily bar chart. The bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,727.30. Bears' next near-term downside price objective is closing prices below solid chart support at $1,650.00. First resistance is seen at $1,700.00 and then at the overnight high of $1,709.80. First support is seen at $1,675.00 and then at $1,660.00.
May silver futures bulls have also faded as prices hit a fresh nearly three-week low overnight. A two-month-old uptrend on the daily bar chart has also been at least temporarily negated. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $35.80 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of $32.715. First resistance is seen at $33.50 and then at $34.00. Next support is seen at $33.00 and then a $32.715.
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