Gold and Silver’s Decline is Purely “Technical” (not Fundamental)

(Kitco News) - Gold and silver prices are down in midday U.S. trading Monday, with silver solidly lower and hitting a three-month low. Technical selling is featured in both metals to start the trading week. The precious metals bulls have also been crimped early this year by better U.S. economic data that has prompted lower expectations from the marketplace for U.S. interest rate cuts sooner from the Federal Reserve. February gold was last down $3.70 at $2,025.50. March silver was last down $0.411 at $22.30.

U.S. stock index futures are higher near midday and have hit new contract and 12-month highs. The rally in the U.S. stock market has also been a negative for the precious metals, as equities are a competing asset class for gold and silver.

China kept its key interest rates unchanged at the latest PBOC central bank monetary policy meeting. That was also disappointing for the raw commodity market bulls, who want to see China’s central bank stimulate the world’s second-largest economy and a voracious consumer of raw commodities.

The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil prices are up and trading around $75.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.096%.

Technically, February gold futures bulls still have the overall near-term technical advantage but have faded recently. A three-month-old uptrend on the daily bar chart is in serious jeopardy. Bulls’ next upside price objective is to produce a close above solid resistance at $2,067.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today’s high of $2,034.10 and then at Friday’s high of $2,041.90. First support is seen at today’s low of $2,017.40 and then at the January low of $2,004.60. Wyckoff's Market Rating: 6.0.

March silver futures prices hit a three-month low today. The silver bears have the solid overall near-term technical advantage. A steep six-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.50. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at $22.50 and then at today’s high of $22.78. Next support is seen at today’s low of $22.04 and then at $21.75. Wyckoff's Market Rating: 2.5.

March N.Y. copper closed down 200 points at 376.65 cents today. Prices closed near mid-range today. The copper bears have the overall near-term technical advantage. Prices are in a downtrend on the daily bar chart.

Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the October low of 355.75 cents. First resistance is seen at today’s high of 379.15 cents and then at 383.00 cents. First support is seen at the January low of 371.45 cents and then at 370.00 cents. Wyckoff's Market Rating: 3.5.

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This article originally appeared on Kitco News