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Gold Prices Pull Back After Recent Strong Gains

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(Kitco News) - Gold prices are down in early U.S. trading Wednesday on some normal profit taking and chart consolidation after hitting a six-year high of $1,442.90 in August futures on Tuesday. Bulls still have the solid technical advantage. August gold futures were last down $8.10 an ounce at 1,410.60. July Comex silver prices were last down $0.02 at $15.28 an ounce.

Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins.

The markets were just slightly rattled Tuesday afternoon when Federal Reserve Chairman Jerome Powell said the Fed will not be pressured into cutting U.S. interest rates without the economic data to back any cut. U.S. stocks backed off a bit on Powell’s remarks.

A main focus of the marketplace at mid-week is the late-week meeting between U.S. President Trump and Chinese President Xi in Japan at the G20 confab—possibly after all the markets are closed on Friday. The two will discuss their ongoing trade war. The outcome of that meeting is uncertain and could have major implications for many markets. As has been the case since the trade war began, there are conflicting comments coming from the U.S. side. Reports attributed to U.S. trade officials Tuesday played down any significant progress to be expected at the summit meeting, other than a pledge that both sides will keep talking. The U.S. stock markets has somewhat reacted positively Wednesday morning to a comment from U.S. Treasury Secretary Mnuchin today, saying a U.S.-China trade deal is “90 percent done.”

The Iran-U.S. confrontation has turned to a war of words this week. Both sides are tossing harsh rhetoric at each other. This situation is bullish for safe-haven gold and for crude oil, and is not likely to de-escalate any time soon.

In other news, Bitcoin is posting gains of over $1,200 today, hit a 17-month high, and is trading around $12,500. Part of the buying in the crypto currency is tied to the recent news that FaceBook is launching its own digital currency.

The key “outside markets” today see Nymex crude oil prices higher, at a four-week high, and trading around $58.85 a barrel. Meantime, the U.S. dollar index is firmer on a corrective bounce after hitting a three-month low Tuesday. 

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, advance economic indicators and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls still have the strong overall near-term technical advantage. Prices are in a four-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 this week’s high of $1,442.90. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,400.00. First resistance is seen at $1,415.00 and then at $1,420.00. First support is seen at this week’s low of $1,403.60 and then at $1,400.00. Wyckoff's Market Rating: 8.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have the overall near-term technical advantage. Prices are in a four-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 last week’s high of $15.555 and then at $15.73. Next support is seen at today’s low of $15.16 and then at $15.00. Wyckoff's Market Rating: 6.0.

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.