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Gold Down as U.S. Dollar Pops; Bearish “Fed Speak”

(Kitco News) - Gold prices ended the U.S. day session moderately lower Tuesday. Strong daily gains in the U.S. dollar index emboldened the sellers in gold and silver today. August Comex gold was last down $7.10 at $1,177.00 an ounce. July Comex silver was last down $0.402 at $15.74 an ounce.

Gold and silver markets traders also got some bearish “Fed speak” Tuesday. Federal Reserve Governor Jerome Powell said the U.S. central bank will raise interest rates in September and again in December, if his economic growth projections prove accurate. He then said there is a 50-50 chance his economic forecast will pan out. San Francisco Fed President John Williams also recently predicted two Fed rate increases yet this year. The past several years of easy U.S. monetary policy have mostly worked in favor of the precious metals market bulls.

Amid a summertime trading atmosphere and no other major world geopolitical developments, Greece by default remains on the front burner of the market place. Greece and EU officials are still meeting early this week to try to finalize a debt-restructuring deal. The two negotiating parties are closer to agreement on a deal, but more tough hurdles need to be overcome, reports said. Now, a meeting is scheduled between Greece and EU officials on Wednesday. Then a summit of EU leaders is scheduled for Thursday and Friday.

There are also some reports that said some EU officials—especially Germany--do not believe a deal with Greece is imminent. Greece has a big debt payment due on June 30, and presently does not have the funds for it. Meantime, the European Central Bank continues to provide daily emergency cash to Greek banks, which are seeing heavier customer withdrawals of cash. The market place views the present Greece debt talks as improving, as evidenced by the increase in investor /trader risk appetite early this week—which is also a negative for safe-haven gold.

A batch of U.S. economic data released Tuesday had little impact on the gold and silver markets.

The London P.M. gold fix is $1,178.00 versus the previous A.M. fix of $1,183.35.

Technically, August gold futures prices closed nearer the session low today. Gold bears have the firm overall near-term technical advantage and are gaining downside momentum this week. A fledgling uptrend on the daily bar chart has been negated. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the June low of $1,161.00. First resistance is seen at $1,180.00 and then at today’s high of $1,187.70. First support is seen at today’s low of $1,175.70 and then at $1,170.00. Wyckoff’s Market Rating: 2.5

July silver futures prices closed nearer the session low and hit a two-month low today. Silver bears have the firm overall near-term technical advantage and gained more power today. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $16.43 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $15.31. First resistance is seen at $16.00 and then at today’s high of $16.175. Next support is seen at today’s low of $15.67 and then at the April low of $15.595. Wyckoff's Market Rating: 2.0.

July N.Y. copper closed up 465 points at 261.40 cents today. Prices closed nearer the session high on short covering in a bear market. Prices Friday hit a three-month low. Copper bears still have the firm near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 270.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of 255.40 cents. First resistance is seen at today’s high of 262.95 cents and then at 265.00 cents. First support is seen at 260.00 cents and then at today’s low of 256.85 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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