Gold At 6-Mo. Low; Bulls Can’t Catch A Break
(Kitco News) - Gold prices are moderately lower and hit another six-month low in early U.S. trading Wednesday. The yellow metal can’t hold a bid despite some risk aversion seen in the marketplace this week, due to worries about a global trade war. It seems the specter of less commerce in raw commodities if a trade war would break out is trumping safe-haven buying. Indeed, gold at present is acting like a raw commodity instead of a safe-haven asset. August Comex gold futures were last down $3.10 an ounce at $1,275.40. July Comex silver was last down $0.048 at $16.275 an ounce.
A strong U.S. dollar is also working against the precious metals markets. The U.S. dollar index hit another 11-month high overnight. Since gold is priced in U.S. dollars on most world markets, any appreciation of the greenback makes the metal more expensive to purchase in non-U.S. currency.
World stock markets were firmer overnight and U.S. stock indexes are also pointed higher openings when the New York day session begins. While the U.S. and China have threatened each other with trade import tariffs, and the situation has escalated this week, many still believe the two largest economies of the world will find a compromise to avoid a full-blown trade war. That’s the thinking of the marketplace today, anyway.
The other key “outside market” today finds Nymex crude oil prices firmer and trading just above $65.00 a barrel. Oil traders are looking ahead to the late-week OPEC meeting, at which time Saudi Arabia and Russia are expected to announce they will increase oil production.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales, and the weekly DOE liquid energy stocks report.
Technically, gold bears have the firm overall near-term technical advantage amid a price downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in August futures above solid 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 $1,251.90. First resistance is seen at $1,280.00 and then at this week’s high of $1,286.80. First support is seen at today’s low of $1,272.10 and then at $1,265.00. Wyckoff's Market Rating: 3.5
July silver futures bears have the overall near-term technical advantage. 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 $16.50 and then at this week’s high of $16.70. Next support is seen at $16.19 and then at the May low of $16.07. Wyckoff's Market Rating: 4.0.