Gold Gets No Support From Currency Market Turmoil
(Kitco News) - Gold prices are trading near unchanged in early U.S. dealings Friday, and seeing little benefit from a roiled world foreign exchange market. December gold futures were last up $0.60 an ounce at $1,220.40. September Comex silver was last down $0.087 at $15.375 an ounce.
Global stock markets were mostly lower overnight, with European shares leading the way with solid losses. The currency markets are in keen focus late this week as the Russian ruble has sunk against the U.S. dollar and the Euro currency fell to a one-year low against the greenback. The Euro currency has taken a beating on the world foreign exchange market today, as the Euro zone has a heavier exposure to the Turkish lira, which has been pummeled recently on the foreign exchange market—losing around 15% of its value just this week. All of the above have pushed the U.S. dollar index to a 13-month high today, on safe-haven demand. The world marketplace is especially concerned about the Turkish lira’s situation expanding into a contagion of secondary world currencies. The Financial Times has reported the European Central Bank is examining several European banks’ exposure to the lira. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
The gold and silver market bulls are frustrated the currency market turmoil has not at all benefitted the safe-haven metals—at least not yet.
The key U.S. data point of the week is Friday morning’s consumer price index report for July, which came in at up 0.2% from June, which was right in line with market expectations. The precious metals markets showed little reaction. Thursday’s producer price index for July came in lower than expected, at unchanged from June when a 0.2% rise was expected.
Other U.S. economic data due for release Friday includes the monthly Treasury statement of receipts and outlays.
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 $1,244.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at this week’s high of $1,226.00 and then at $1,230.00. First support is seen at last week’s low of $1,212.50 and then at $1,200.00. 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 $15.75 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 last week’s high of $15.635 and then at $15.75. Next support is seen at last week’s low of $15.25 and then at the July low of $15.185. Wyckoff's Market Rating: 1.5.