· Gold futures settled lower Monday after upbeat readings on economic activity in China and the U.S. weighed on haven metals while providing a lift to equity markets.
· June gold GCM9, -0.05% finished off $4.30, or 0.3%, at $1,294.20 an ounce. Bullion prices ended last week under pressure, falling back below the $1,300-an-ounce level. On a most-active basis gold ended the quarter with a gain of around 1.1% but well off its February high near $1,348 an ounce.
· The Caixin China manufacturing purchasing managers index to 50.8 in March from 49.9 in February, marking the first reading above 50 - signaling an expansion in activity - in four months.
· On top of that, the Institute for Supply Management's manufacturing index showed that activity in the U.S. accelerated, coming in at a stronger-than-expected 55.3 in March. Concerns about global economic expansion had been part of a slate of themes, including geopolitical worries, that had helped to drive gold prices higher.
· However, signs that those fears are abating -- at least momentarily -- have created some headwinds for the precious metal. That includes a rally in stocks, which tend to reflect appetite for assets perceived as risky and away for those viewed as safe plays.
· The U.S. retail sales report, released this morning, showed a drop of 0.2% in February, which was a downside miss from expectations of a0.2% rise. This report did put some brief downside price pressure on the U.S. dollar index, which in turn helped to lift gold and silver prices above unchanged for a short while.
· Minneapolis Federal Reserve Bank President Neel Kashkari said Monday now is not the time to lower U.S. interest rates. While he said risks to the U.S. economy have increased, Kashkari said the Fed needs more time to see if those risks pan out. He said he is worried about low inflation. Kashkari was interviewed by the Wall Street Journal and is one of the Fed’s more dovish members on U.S. monetary policy.
· Technically, June gold futures prices closed nearer the session low today. The bulls still have the overall near-term technical advantage but have faded badly recently and need to show fresh power soon to avoid more serious chart damage being inflicted. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,330.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,287.50. First resistance is seen at $1,300.00 and then at Friday’s high of $1,304.60. First support is seen at last week’s low of $1,291.30 and then at $1,287.50. Wyckoff's Market Rating: 6.0
Reference: Market Watch, Kitco
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