Gold, Silver Slump To 12-Mo. Lows Amid Resurgent Greenback
(Kitco News) - Gold and silver prices are moderately lower in early U.S. trading Friday. Both metals have just dropped to fresh 12-month lows. A rally in world stock markets, including major U.S. stock indexes hitting multi-month highs overnight, show there is little risk aversion in the marketplace at present to help out the safe-haven metals. A solid rebound in the U.S. dollar index this week is also a significantly bearish force working against the precious metals. August gold futures were last down $8.60 an ounce at $1,238.00. July Comex silver was last down $0.182 at $15.795 an ounce.
The greenback bulls have had a very good week. The U.S. dollar index is now not far below its recent 12-month high. A U.S. consumer inflation reading Thursday that hit a six-year high (CPI at 2.9% annually) has bolstered notions the Federal Reserve will raise interest rates a total of four times this year.
In overnight news, the British pound is under some pressure versus the U.S. dollar today as President Trump has criticized U.K. Prime Minister May for her Brexit strategy. May is perceived to be in a very weak position in her leadership, at present.
The other key “outside market” today finds Nymex crude oil prices slightly weaker on follow-through selling from strong losses posted Wednesday, and are trading just above $70.00 a barrel. A lower close in the Nymex oil futures market today would be a technical clue that crude oil has put in at least a near-term top, if not a major top. Such would also be a bearish development for the metals and the raw commodity sector, in general.
U.S. economic data due for release Friday includes import and export prices and the University of Michigan consumer sentiment survey.
Technically, gold bears have the solid 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 $1,280.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at the overnight high of $1,248.50 and then at $1,250.00. First support is seen at today’s low of $1,236.20 and then at $1,230.00. Wyckoff's Market Rating: 2.0
September silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the December low of $15.50. First resistance is seen at $16.00 and then at this week’s high of $16.26. Next support is seen at today’s low of $15.70 and then at $15.50. Wyckoff's Market Rating: 2.0.