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Gold Down As U.S. Dollar Index Hits 11-Mo. High

Kitco News

(Kitco News) - Gold prices are moderately lower in early U.S. trading Friday. Despite some risk aversion in the marketplace today, the gold market has instead chosen to focus on the recent strong rally in the U.S. dollar index, which today scored an 11-month high. August Comex gold futures were last down $9.00 an ounce at $1,299.20. July Comex silver was last down $0.037 at $17.225 an ounce.

World stock markets were mostly weaker overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. World trade war concerns are on the front burner of the marketplace late this week, which is causing anxiety among traders and investors.

The Trump administration has just levied $50 billion of new tariffs on Chinese imports. It is expected that China will again retaliate with its own tariffs on U.S. imports, with agriculture products in the crosshairs. President Trump said today if China retaliates the U.S. will slap still more tariffs on China. Some commodity market prices have been hit hard by worries of a full-blown trade war between the leading economies of the world.

Traders and investors are still buzzing about the plunge in the Euro currency and big rally in the U.S. dollar index on Thursday. The surprisingly dovish European Central Bank meeting results on Thursday had a major impact on the world foreign exchange markets.

The Bank of Japan today at its regular meeting left its very easy monetary policy unchanged.

The Euro zone consumer price index rose by 0.5% in May from April, and was up 1.9%, year-on-year, it was reported today. Those numbers were right in line with market expectations.

The other key “outside market” today finds Nymex crude oil prices modestly lower and trading just below $67.00 a barrel.

U.S. economic data due for release Friday includes the Empire State manufacturing survey, industrial production and capacity utilization and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bulls have the slight near-term technical advantage, but they need to show fresh power soon to keep it. Gold bulls' next upside near-term price breakout objective is to produce a close in August futures above the May high of $1,332.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,286.80. First resistance is seen at today’s high of $1,306.70 and then at this week’s high of $1,313.00. First support is seen at this week’s low of $1,294.50 and then at the June low of $1,293.10. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the April high of $17.425 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.75. First resistance is seen at this week’s high of $17.35 and then at $17.425. Next support is seen at today’s low of $17.11 and then at $17.00. Wyckoff's Market Rating: 6.5.

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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