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Gold, Silver Feel The Heat Of Strong U.S. Dollar

Kitco News

(Kitco News) - Gold and silver prices are down again in early U.S. trading Thursday. Gold set another six-month low, while silver fell to a four-week low. An appreciating U.S. dollar on the foreign exchange market continues to hamstring the precious metals market bulls. And a deteriorating world trade situation has not yet provided significant safe-haven support for gold and silver. August Comex gold futures were last down $8.30 an ounce at $1,266.10. July Comex silver was last down $0.034 at $16.275 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. The specter of a global trade war is denting trader and investor confidence and is pressuring world stock and commodity markets. Gold and silver continue to act like the raw commodities they are, instead of safe-haven stores of value.

In overnight news, the central banks of Switzerland and Norway held their regular monetary policy meetings.  The Swiss National Bank kept its policy very easy with negative interest rates, while Norway’s central bank also kept its monetary policy unchanged, with its main interest rate at a very low 0.5%. The Bank of England is also holding its regular monetary policy meeting today.

The key “outside markets” today find the U.S. dollar index solidly higher and hitting another 11-month high. The strong greenback is a major bearish weight on the raw commodity sector, along with the world trade worries.

Meantime, Nymex crude oil prices lower and trading around $64.50 a barrel. Oil traders are looking ahead to the OPEC meeting that begins Friday in Vienna, Austria. Saudi Arabia and Russia are expected to announce they will increase oil production. Falling oil prices are also negative for the raw commodity sector, given that oil is arguably the sector leader.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, the monthly house price index, and leading economic indicators.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bears have the firm overall near-term technical advantage amid a price downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in August futures above solid resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,251.90. First resistance is seen at today’s high of $1,272.00 and then at Wednesday’s high of $1,278.60. First support is seen at today’s low of $1,263.60 and then at $1,260.00. Wyckoff's Market Rating: 3.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at $16.37 and then at $16.50. Next support is seen at $16.19 and then at the May low of $16.07. Wyckoff's Market Rating: 3.0.

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.