Gold Down, Hovers Near Recent 1.5-Year Low
(Kitco News) - Gold prices are moderately lower and trading near the recent 1.5-year low in early U.S. trading Thursday. Bearish “outside market” forces that see a stronger U.S. dollar and lower crude oil prices are pressuring the precious metals markets so far today. December gold futures were last down $5.10 an ounce at $1,222.50. September Comex silver was last down $0.042 at $15.41 an ounce.
The World Gold Council has reported that gold demand in India will be better in the second half of this year, due to good crop harvests and the festival seasons. India and China run neck-and-neck as the leading gold consumer in the world.
World stock markets were mostly lower overnight, on renewed worries about the U.S. imposing higher tariffs on Chinese imports. U.S. stock indexes are pointed toward lower openings when the New York day session begins.
The White House announced Wednesday that it is considering increasing from 10%, to 25%, the tariffs on Chinese imports. The world’s two largest economies going at it on trade is a keen worry in the global marketplace.
Traders are looking ahead to Friday’s U.S. jobs report for July. Wednesday’s ADP national employment report for July showed a rise of 219,000. That number was higher than the expected rise of 185,000. The non-farm payrolls number on Friday is forecast to come in at up 190,000. The stronger ADP number suggests Friday’s figure could come in higher, too.
Wednesday’s FOMC meeting of the Federal Reserve saw no changes in Fed policy. However, the marketplace deemed the FOMC statement as being slightly hawkish on U.S. monetary policy.
The Bank of England met today for its regular monetary policy gathering and raised its key interest rate by 0.25%. The move was not unexpected by many.
In other overnight news, the Euro zone producer price index for July was up 0.4% from June and up 3.6%, year-on-year. That inflation data from the Euro zone is “running hot.”
The key “outside markets” today find Nymex crude oil prices lower and trading just above $67.00 a barrel. The U.S. dollar index is higher early today and back near its 12-month high scored a few weeks ago.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the ISM New York report on business, and manufacturers’ shipments and inventories.
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 December 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 the overnight high of $1,230.00 and then at this week’s high of $1,237.80. First support is seen at the July low of $1,221.00 and then at $1,210.00. Wyckoff's Market Rating: 1.0
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 this week’s high of $15.635 and then at $15.70. Next support is seen at last week’s low of $15.34 and then at the July low of $15.185. Wyckoff's Market Rating: 1.5.