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Gold Down As Raw Commodities Sink Amid U.S.-China Trade War

Kitco News

(Kitco News) - Gold and silver prices are moderately lower in early U.S. trading Wednesday, pressured in part by another volley of U.S. trade sanctions levied against China that has prompted a sell-off in many raw commodity markets. A higher U.S. dollar index today is also a negative for the precious metals markets. August gold futures were last down $5.10 an ounce at $1,250.20. July Comex silver was last down $0.142 at $15.945 an ounce.

The important U.S. economic data due out this week includes the just-released producer price index for June, which came in at up 0.3% from May, which was hotter than the 2.0% rise that was forecast. The data did not have a significant impact on the precious metals or other markets. The June CPI report on Thursday is also seen up 0.2% from May.

World stock markets were lower overnight. U.S. stock indexes are pointed toward solidly lower openings when the New York day session begins. The U.S. has targeted China with 10% tariffs on another $200 billion in Chinese product imports, and China again responded with another threat to retaliate. The U.S.-China trade war has at least temporarily cast a pall over world equity markets at mid-week.

U.S. President Trump is in Europe today meeting with European leaders, with a meeting with Russian President Vladimir Putin later this week. The marketplace will watch Trump’s meetings closely, as the U.S. president has had harsh words for European leaders regarding trade and their lack of financial support for NATO.

The key “outside markets” today find Nymex crude oil prices lower and trading around $73.50 a barrel. Libyan oil exports are hitting the world market again, after being disrupted by political violence, and that’s putting some pressure on crude today.

Meantime, the U.S. dollar index is higher on a corrective bounce from recent selling pressure.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.

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 $1,287.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,230.00. First resistance is seen at Tuesday’s high of $1,261.00 and then at this week’s high of $1,266.90. First support is seen at this week’s low of $1,247.70 and then at last week’s low of $1,238.80. Wyckoff's Market Rating: 2.5

Live 24 hours silver chart [ Kitco Inc. ]

September 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 $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 the overnight high of $16.11 and then at this week’s high of $16.26. Next support is seen at the overnight low of $15.915 and then at last week’s low of $15.80. Wyckoff's Market Rating: 2.5.

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