Gold, Silver Prices Up As U.S. Dollar Momentum Fades
(Kitco News) - Gold and silver prices are moderately higher in early U.S. trading Monday, supported in part by a slipping U.S. dollar index that fell to a three-week low overnight. Some bargain hunting in the cash market and short covering in the futures market are also featured, following recent losses that drove the two precious metals prices to multi-month lows last week. August gold futures were last up $9.50 an ounce at $1,265.30. July Comex silver was last down $0.146 at $16.215 an ounce.
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. There continues to be little risk aversion in the marketplace at present, despite a U.S.-China trade war that is escalating and reports that the U.S.-North Korea relationship is breaking down.
There were no fresh, major markets-moving news developments over the weekend. Key U.S. economic data released this week includes the producer price index on Wednesday and the consumer price index on Thursday.
One worrisome development among economists in recent months is the very flat U.S. Treasury yield curve (the yield difference between the 2-year and 10-year notes) that has now fallen to a level below 0.3%. If the yield curve inverts, whereby the 2-year note yield rises above the 10-year note yield, such would strongly suggest a U.S. recession is on the horizon. The very closely watched yield curve and its potential for inverting could keep the Federal Reserve from raising U.S. interest rates as quickly as it would like—given the present stronger U.S. economic growth pace.
The other key “outside market” today finds Nymex crude oil prices slightly weaker and trading around $73.50 a barrel. The rallying oil market is a bullish element for the precious metals markets.
U.S. economic data due for release Monday includes the employment trends index and consumer credit.
Technically, gold bears still 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 $1,287.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,238.80. First resistance is seen at $1,270.00 and then at $1,275.00. First support is seen at the overnight low of $1,255.70 and then at $1,250.00. Wyckoff's Market Rating: 3.0
September silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.565 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the December low of $15.50. First resistance is seen at $16.38 and then at $16.50. Next support is seen at $16.00 and then at last week’s low of $15.80. Wyckoff's Market Rating: 3.0.