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Gold Rebounds From Early 3-Week Low On Bargain Hunting, Short Covering

(Kitco News) - Gold prices were ending the U.S. day session higher and near the daily high, on a corrective rebound from selling pressure that pushed prices to a three-week low overnight. Short covering in the futures market and bargain hunting in the cash market were featured. A weaker U.S. dollar index on this day also worked in favor of the precious metals bulls. August Comex gold was last up $12.90 an ounce at $1,332.20. September Comex silver was last up $0.187 at $19.80 an ounce.

Today’s meeting of the European Central Bank saw the ECB hold interest rates steady, as expected, and did not announce new monetary policy stimulus measures. At his press conference, ECB President Mario Draghi did not lay out significant plans for future stimulus coming from the ECB, as some thought he might. World stock markets have been buoyed this summer on ideas the major central banks of the world will continue their very easy money policies—especially after the Brexit vote in late June.

The Japanese yen rallied against the U.S. dollar Thursday after Bank of Japan Governor Kuroda said he is not in favor of “helicopter money,” implying he does not want extreme quantitative easing measures coming from the BOJ.

The key “outside markets” on Thursday saw the U.S. dollar index lower after hitting a four-month high Wednesday. Nymex crude oil prices were also lower and hovering just below $45.00 a barrel. If crude oil continues to trend lower, that will be a significant bearish weight on all the raw commodity markets.

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Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures prices closed near the session high. The gold bulls still have the overall near-term technical advantage, but have faded recently. Prices have been trending lower for three weeks. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at Wednesday’s high of $1,338.80 and then at $1,348.00. First support is seen at $1,320.00 and then at today’s low of $1,310.70. Wyckoff’s Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures prices closed nearer the session high today on short covering and bargain hunting after hitting a two-week low early on today. The silver market bulls still have the overall near-term technical advantage but have faded recently. Prices have been trending lower for three weeks. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.22 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at this week’s high of $20.295. Next support is seen at $19.50 and then at today’s low of $19.27. Wyckoff's Market Rating: 6.5.

September N.Y. copper closed up 75 points at 226.15 cents today. Prices closed near mid-range today. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the March high of 232.95 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of 211.65 cents. First resistance is seen at the July high of 227.75 cents and then at 230.00 cents. First support is seen at today’s low of 224.50 cents and then at 222.10 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

 

 

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 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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