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Gold Higher As U.S. Dollar In Meltdown

(Kitco News) - Gold prices are higher in early U.S. trading Tuesday, boosted by a slumping U.S. dollar index that hit a seven-week low overnight. December Comex gold was last up $10.00 an ounce at $1,358.20. September Comex silver was last up $0.158 at $20.005 an ounce.

The precious metals markets are supported on this day by bullish “outside markets.” The U.S. dollar index is trading solidly lower partly due to a San Francisco Fed study that said the Fed’s U.S. inflation target could be raised. Such would allow the Fed to keep interest rates lower for longer and also suggests the Fed is worried about the growth rate of the U.S. economy in the coming months or few years. Meantime, Nymex crude oil prices are slightly higher and hit a four-week high overnight, supported in part on recent reports Saudi Arabia said it is ready to work with other oil-producing nations to stabilize world oil prices. The OPEC cartel is scheduled to meet in late September.

World stock markets were mostly weaker overnight and the U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. Some profit-taking from recent gains is seen today.

Arguably the most important data point of this week will be Wednesday afternoon’s release of the minutes of the latest FOMC meeting of the Federal Reserve.

There is an important batch of U.S. economic data due for release Tuesday, including real earnings, the consumer price index, new residential construction, and industrial production and capacity utilization. This data could significantly move the markets today.

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

Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,384.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the July low of $1,318.50. First resistance is seen at $1,363.60 and then at the August high of $1,374.20. First support is seen at $1,350.00 and then at the overnight low of $1,344.80. Wyckoff’s Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver bulls have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing futures 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 $19.00. First resistance is at $20.235 and then at last week’s high of $20.515. Next support is seen at $19.66 and then at last week’s low of $19.515. Wyckoff's Market Rating: 7.0.

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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