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Gold Prices Up; Charts Improve and Geopolitics Loom

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(Kitco News) - Gold prices are modestly higher in early-morning U.S. trading Wednesday. A more bullish technical posture on the charts, a still-wobbly U.S. stock market, and rising tensions in the Persian Gulf are working to lift the safe-haven gold market today. June gold futures were last up $3.90 an ounce at $1,300.30. July Comex silver was last down $0.002 at $14.81 an ounce.

World stock markets were mixed overnight, with European indexes mostly down and Asian stocks mostly higher. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

Traders and investors are somewhat assuaged at mid-week following more upbeat comments from President Trump and China officials Tuesday that suggested the world’s two largest economies want an amenable resolution soon in their trade war.

However, the world marketplace at present seems to be overlooking a U.S. military build-up in the Middle East. President Trump may be preparing to send 100,000 or more U.S. troops to the region, to complement the U.S. naval task force steaming to the Persian Gulf. This week’s attacks on two Saudi oil tankers in the Strait of Hormuz showed that tensions in the region are on the rise—namely a U.S.-Iran stare-down. This situation is likely to move to the front burner of the marketplace in the coming weeks.

Economic data coming out of China today showed more decelerating growth. It’s industrial production, retail sales and fixed-asset investment all slowed in April from March and came in below expectations.

Meantime, the Euro zone reported its first-quarter GDP at up 0.4% from the fourth quarter of last year and up 1.2%, year-on-year. Those numbers were right in line with market expectations and help to confirm European Union economic growth remains tepid.

The key “outside markets” today see the U.S. dollar index slightly firmer. Meantime, Nymex crude oil prices are lower and trading around $61.00 a barrel.  

It’s a very busy day for U.S. economic data releases, including the weekly MBA mortgage applications survey, retail sales, the Empire State manufacturing survey, industrial production and capacity utilization, manufacturing and trade inventories, the NAHB housing index, Treasury international capital data and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls and bears are on a level overall near-term technical playing field. Bulls are working on a fledgling price uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the April high of $1,314.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,267.30. First resistance is seen at this week’s high of $1,304.20 and then at $1,310.00. First support is seen at the overnight low of $1,293.60 and then at $1,290.00. Wyckoff's Market Rating: 5.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears have the firm overall near-term technical advantage. Prices are in a nearly three-month-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.15 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at this week’s high of $14.865 and then at $15.00. Next support is seen at this week’s low of $14.615 and then at the May low of $14.57. Wyckoff's Market Rating: 3.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.