Gold Bulls Work To Push Prices Back Above $1,300
(Kitco News) - Gold Prices are modestly higher in early U.S. trading Wednesday. Some short covering in the futures market and bargain hunting in the cash market are featured. If the gold bulls cash push and close prices back above the critical $1,300.00 level, then a near-term market bottom would likely be in place. June Comex gold futures were last up $2.10 an ounce at $1,294.10. July Comex silver was last down $0.045 at $16.53 an ounce.
The world’s traders and investors are not so upbeat today, following comments from U.S. President Donald Trump on Tuesday that suggested the U.S. and China are still far apart on a trade dispute resolution. Also, the NAFTA trade talks between the U.S., Mexico and Canada have broken down. Furthermore, Trump said his meeting with North Korea’s leader Kim Jong Un may not take place. Political uncertainty in Italy, as a new government tries to form, is also added to the mix of more anxiety in the world marketplace. All of the above augurs in favor of the safe-haven gold and silver markets.
There was also some downbeat economic news coming out of the European Union Wednesday, as business activity in the bloc slowed in May for the fourth straight month.
The U.S. data-point highlight of the week will be Wednesday afternoon’s release of the FOMC minutes from the last meeting, held on May 1-2. The FOMC minutes report has moved markets in recent months. Traders will be examining the report for clues on the trajectory of interest rate increases and FOMC members’ take on inflation.
The key “outside markets” today find Nymex crude oil prices weaker on profit taking after hitting a 3.5-year high on Tuesday.
Meantime, the U.S. dollar index is higher and not far below this week’s six-month high.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the U.S. flash services PMI and the flash manufacturing PMI, new residential home sales and the weekly DOE liquid energy stocks report.
Technically, June gold bears have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above what is now solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,247.20. First resistance is seen at today’s high of $1,298.40 and then at $1,300.00. First support is seen at today’s low of $1,288.50 and then at this week’s low of $1,281.20. Wyckoff's Market Rating: 3.5
July silver futures bears have the overall near-term technical advantage, but the bulls are starting out the week strong. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at this week’s high of $16.70 and then at the May high of $16.865. Next support is seen at Tuesday’s low of $16.465 and then at this week’s low of $16.28. Wyckoff's Market Rating: 3.5.