Gold Up, At 2-Mo. High As Marketplace Scared
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(Kitco News) - Gold prices are modestly higher and hit a two-month high in early U.S. trading Friday. Safe-haven demand has been featured in the yellow metal this week amid the U.S.-North Korea crisis that many fear may spin out of control. Gold prices are now within easy striking distance of the major psychological level of $1,300.00. December Comex gold was last up $2.80 an ounce at $1,293.10. September Comex silver was last up $0.05 at $17.115 an ounce.
World stock markets were mostly lower again overnight, amid the heightened trader and investor anxiety in the marketplace. The U.S.-North Korea tensions have not receded and escalated a bit Thursday as U.S. President Trump again warned North Korea that any military action by that regime against a U.S. friend would prompt a massive response from the U.S. He also said Thursday his previous “fire and fury” statement maybe was not tough enough. Some are calling this matter then next Cuban missile crisis. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins.
Noted investor Ray Dalio is reportedly advising investors to have 5% to 10% of their investment portfolio in gold.
U.S. Treasuries are also seeing increased safe-haven demand this week.
The U.S. dollar index is modestly higher in early U.S. trading Friday, on some mild safe-haven demand for the greenback. However, the dollar index has not yet been significantly impacted by the U.S.-North Korea face-off.
The Japanese yen has seen significant safe-haven demand this week coming from Asian investors.
Nymex crude oil futures are modestly lower in early U.S. trading. The International Energy Agency has revised down its world oil demand estimate. The IEA also estimated that OPEC members’ compliance to their production quotas is only about 75%.
The key U.S. data point on Friday is the July consumer price index. CPI is forecast to come in at up 0.2% from June. The June reading was at 0.0%. Inflation data from around the world has been on the weak side recently. Such is going to make it harder for the world’s central banks to raise their interest rates.
Other U.S. economic data due for release Friday includes real earnings.
Technically, December gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside technical objective is pushing prices above chart resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at this week’s low of $1,257.10. First resistance is seen at $1,295.00 and then at $1,300.00. First support is seen at the overnight low of $1,289.80 and then at $1,280.00. Wyckoff’s Market Rating: 7.0
September silver bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. The next upside price breakout objective is closing futures prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.25. First resistance is seen at this week’s high of $17.24 and then at $17.50. Next support is seen at $17.00 and then at $16.85. Wyckoff's Market Rating: 6.0.