In early U.S. trading on Monday, gold and silver prices experienced a sharp decline as profit-taking pressure and weak long liquidation in the futures markets dampened investor sentiment. Additionally, a perceived easing of tensions in the Middle East further acted as a negative factor for the safe-haven metals.

The June gold futures dropped by $57.50 to reach $2,356.20, while the May silver futures saw a decline of $1.309, settling at $27.50. According to broker SP Angel, the recent surge in gold prices has led many miners to engage in forward selling, potentially tempering further price increases. The ability to secure futures prices at around $2,373 an ounce is expected to attract substantial tonnages of gold from miners aiming to secure profits in the face of inflation.

Gold prices have been driven higher in recent weeks partly due to increased trading activity on China's futures exchanges. While Asian and European stock indexes showed mixed to firmer trends overnight, U.S. stock indexes indicated higher openings as the New York day session began.

In other news, China's central bank opted to leave its benchmark lending rates unchanged, in line with market expectations. The one-year and five-year prime loan rates will remain at 3.45% and 3.95%, respectively.

The key outside markets revealed a slightly firmer U.S. dollar index. Nymex crude oil prices remained relatively steady, hovering around $83.00 a barrel. Meanwhile, the yield on the benchmark 10-year U.S. Treasury note stood at 4.64%.

Looking ahead, the U.S. economic data scheduled for release on Monday includes the Chicago Fed national activity index.

From a technical perspective, gold futures bulls continue to maintain a solid overall near-term technical advantage. The daily bar chart shows a nine-week-old uptrend, with the next upside price objective for the bulls being a close in June futures above the solid resistance level of $2,448.80. On the downside, the bears' next near-term price objective is to push futures prices below the solid technical support level at $2,250.00. First resistance is seen at $2,375.00, followed by $2,400.00, while first support is observed at $2,350.00 and then at $2,337.00.

Similarly, the silver bulls possess a solid overall near-term technical advantage. Although fading slightly, silver prices remain in a nine-week-old uptrend on the daily bar chart. The next upside price objective for silver bulls is to close May futures prices above the solid technical resistance level at $30.00. Conversely, the bears' next downside price objective is to close prices below the solid support level at $26.00. First resistance is observed at $28.00, followed by $28.25, while first support is seen at $27.00 and then at $27.575.

Jim Wyckoff, an experienced financial journalist and commodity market expert, has provided his insights and analysis on the markets. Wyckoff's Market Rating for gold and silver stands at 7.5.

It is important to note that the views expressed in this article are those of the author and may not align with Kitco Metals Inc. The author has made every effort to ensure the accuracy of information provided, but neither Kitco Metals Inc. nor the author can guarantee its accuracy. This article is strictly for informational purposes and not a solicitation to engage in any financial transactions. Kitco Metals Inc. and the author do not accept responsibility for any losses or damages that may arise from the use of this publication.