Gold, Silver See Tepid Short-Covering Bounces
(Kitco News) - Gold and silver prices are slightly higher in early U.S. trading Tuesday. Some mild short covering by the shorter-term futures traders is featured in both markets today, following recent losses that have driven prices to 12-month lows. The lack of major market news events in the world at present is allowing the chart-based traders to dominate—and the technicals for both gold and silver remain firmly bearish. August gold futures were last up $1.60 an ounce at $1,227.20. September Comex silver was up $0.125 at $15.545 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.
In overnight news, the Euro zone Markit purchasing managers’ index composite (PMI) was reported at 54.3 in July from 54.9 in June. A number above 50.0 signals expansion in the sector.
Featured in the marketplace early this week is rising world government bond yields, on ideas the major central banks of the world will embark upon rolling back their heretofore easy monetary policies. Reports say the Bank of Japan is on the verge of scaling back its very accommodative policies.
The key “outside markets” today find Nymex crude oil prices higher and trading just above $68.00 a barrel. Meantime, the U.S. dollar index is weaker early today.
The big U.S. economic data point of the week is Friday’s first estimate of gross domestic product (GDP). The number is expected to come in at up a strong 4.4%. However, some analysts are even calling for a number of 5.0% or just above.
U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the U.S. flash services PMI, the flash manufacturing PMI, and the Richmond Fed business survey.
Technically, gold bears have the solid 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 $1,250.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at Monday’s high of $1,235.20 and then at $1,240.00. First support is seen at the overnight low of $1,218.10 and then at last week’s low of $1,210.70. Wyckoff's Market Rating: 1.5
September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at $15.625 and then at $15.75. Next support is seen at today’s low of $15.34 and then at last week’s low of $15.185. Wyckoff's Market Rating: 1.5.