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Gold Prices Surge to 6-Yr. High of $1,415, Back Off A Bit

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(Kitco News) - Gold prices are now trading around steady levels in early morning U.S. trading Friday, after pushing to a six-year high of $1,415.40 in August futures in overnight trading. Silver prices hit a nearly three-month high overnight. Safe-haven demand heading into a very uncertain weekend is featured in the precious metals markets. Also, metals bulls are still feeling the positive effect of the Federal Reserve and European Central Bank leaning to easier monetary policies this week. August gold futures were last up $0.60 an ounce at 1,397.40. July Comex silver prices were last down $0.142 at $15.34 an ounce.

The U.S.-Iran confrontation in the Persian Gulf region has escalated this week with the shooting down of a U.S. drone by Iran. President Trump has appeared to downplay that situation by saying it the downing of the drone could have been a mistake by Iran’s military. Reports overnight said the U.S. was planning a retaliatory strike, but the mission was called off. The report also said the U.S. strikes against Iran remain on the table. Still, this matter will likely intensify before it fully plays out. Traders in some markets are likely to even up their positions heading into the weekend, on worry U.S. warships or warplanes could attack Iran’s military.

The marketplace is still basking in the easy-money stances taken by the Federal Reserve and European Central Bank this week. Stock markets have rallied, government bond yields have dropped, and so has the U.S. dollar. Commodities have been given a shot of adrenalin on ideas more money in world financial system will mean more consumer demand for commodities.

Asian and European stock markets were flat to mixed overnight, pausing from gains seen this week. U.S. stock indexes are pointed toward weaker openings when the New York day session begins, on corrective pullbacks from this week’s solid gains that have prices at or near record highs.

In overnight news, the Euro zone composite purchasing managers index (PMI) came in at 52.1 in June, which was better than the expectations of 51.8. A reading above 50.0 suggests expansion. However, the German manufacturing PMI came in at 45.4. That’s a downbeat reading coming from the Euro zone’s main economic workhorse, Germany, and is a worrisome factor for Euro zone economic conditions in the coming months.

The key “outside markets” today see Nymex crude oil prices higher and trading just at $57.65 a barrel. Meantime, the U.S. dollar index is slightly lower as the greenback bulls are in trouble after this week’s drubbing of the USDX. That’s also bullish for the metals markets. 

U.S. economic data due for release Friday includes the U.S. flash manufacturing PMI, the services PMI, existing home sales, and the Federal Reserve releases stress test results from U.S. banks.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage and gained still more power today. Prices are in an accelerating seven-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,450.00. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,361.50. First resistance is seen at today’s high of $1,415.40 and then at $1,425.00. First support is seen at today’s low of $1,386.10 and then at $1,375.00. Wyckoff's Market Rating: 8.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. 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 $14.625. First resistance is seen at the overnight high of $15.555 and then at $15.73. Next support is seen at Thursday’s low of $15.12 and then at $15.00. Wyckoff's Market Rating: 6.0.

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