Gold Shoots To 9-Wk High Amid Shaky Stock Mkts
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(Kitco News) - Gold prices are posting solid double-digit gains and hit a nine-week high in midday U.S. trading Monday. Safe-haven demand remains in play to start the trading week and the month, as global stock markets are selling off. August gold futures were last up $14.30 an ounce at $1,325.40. July Comex silver prices were last up $0.168 at $14.735 an ounce.
European and Asian stock markets were down overnight. U.S. stock indexes are modestly down at midday but up from their daily lows. The U.S. stock indexes hit three-month lows overnight and are trending lower.
The ongoing U.S. trade war with China and new worries about a U.S. trade dispute with Mexico have traders and investors jittery. In fact, some analysts are now saying the Federal Reserve will have to lower U.S. interest rates this year to offset a slowing pace of economic growth caused by the trade disputes.
Government bond yields in the U.S., Germany and other countries are on the decline as investors seek out safe-haven assets and shed riskier assets like equities.
The European banking sector has been hit especially hard by falling government bond yields that equate to lower interest rates, which in turn hurt banks’ profits. The eight largest banks in the European Union now have a smaller combined market value than JP Morgan, despite the European banks having three times as many assets.
The Euro zone got more downbeat economic news today when the May manufacturing purchasing managers index (PMI) came in at 47.7 versus the forecast for 47.9. Any reading below 50.0 suggests contraction in the sector.
The key “outside markets” today see the U.S. dollar index trading down. Meantime, Nymex crude oil prices are slightly lower and trading around $53.30 a barrel after dropping to a nearly five-month low in overnight trading.
Technically, August gold futures prices were near the session high at midday and hit a nine-week high. The bulls have quickly gained the overall near-term technical advantage. A three-month-old downtrend on the daily bar chart has been soundly negated. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,335.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at today’s high of $1,325.30 and then at $1,330.00. First support is seen at today’s low of $1,310.90 and then at $1,305.00. Wyckoff's Market Rating: 6.5
July silver futures were nearer the session high and hit a two-week high today, on short covering. The silver bears still have the firm overall near-term technical advantage. A three-month-old downtrend on the daily bar chart is now in jeopardy of being negated. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.00 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 today’s high of $14.78 and then at $15.00. Next support is seen at today’s low of $14.565 and then at $14.50. Wyckoff's Market Rating: 2.5.
July N.Y. copper closed up 70 points at 264.65 cents today. Prices closed nearer the session high today and hit a five-month low early on. The copper bears have the firm overall near-term technical advantage. Prices are in a steep seven-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 277.75 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 256.10 cents. First resistance is seen at today’s high of 265.90 cents and then at 267.50 cents. First support is seen at today’s low of 261.10 cents and then at 260.00 cents. Wyckoff's Market Rating: 2.0.