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Gold Pushes To 3-Week High On Weakening Greenback, Bullish Technicals

(Kitco News) - Gold prices ended the U.S. day session solidly higher and hit a three-week high Tuesday. Gold and the other precious metals prices have been supported recently by a slumping U.S. dollar index. The near-term technical postures for the precious metals markets are also fully bullish, which is inviting fresh chart-based buying interest. December Comex gold was last up $12.90 an ounce at $1,372.50. September Comex silver was last up $0.19 at $20.69 an ounce.

The key “outside markets” on Tuesday saw the U.S. dollar index solidly lower and hit a five-week low. The greenback is in a big slump after hitting a four-month high just last week. Meantime, Nymex crude oil prices were lower and hit a four-month low. Oil prices are trending lower, with Nymex futures trading below $40.00 per barrel.

Global stock markets were mostly weaker Tuesday, as falling crude oil prices are a negative for equities, in general, and suggest deflationary price pressures are still problematic in world economies. The weakening world oil prices are also a negative for the raw commodity sector, including the precious metals.

European stocks were down partly on worries about the health of banks in Italy. Asian stocks were somewhat pressured after the Japanese government unveiled its latest economic stimulus program. The $274 billion package was deemed to be a bit less than Asian market watchers expected.

Australia’s central bank cut its interest rate to a record low Tuesday, as expected by the marketplace. There are also central bank meetings in the U.K. and Thailand this week, which will be closely watched by the marketplace.

The Euro zone did get some upbeat economic data Tuesday when the region’s producer price index for June rose 0.7% month-on-month, which was above expectations. The index was down 3.1%, year-on-year, which was also above expectation—although still a worrisome figure on the price deflation front.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures prices closed nearer the session high today. The gold bulls have the solid overall near-term technical advantage and have upside momentum. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,384.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,350.00. First resistance is seen at today’s high of $1,374.20 and then at $1,380.00. First support is seen at $1,360.00 and then at this week’s low of $1,353.20. Wyckoff’s Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures prices hit a four-week high and closed nearer the session high today. The silver market bulls have the solid overall near-term technical advantage and have upside momentum. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.225 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.50. First resistance is seen at today’s high of $20.835 and then at $21.00. Next support is seen at today’s low of $20.385 and then at $20.00. Wyckoff's Market Rating: 7.5.

September N.Y. copper closed down 110 points at 221.05 cents today. Prices closed nearer the session low. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 227.75 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 this week’s high of 224.75 cents and then at 227.75 cents. First support is seen at last week’s low of 218.15 cents and then at 216.00 cents. Wyckoff's Market Rating: 5.0.

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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