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Gold Sees Normal Pause After Recent Solid Gains

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(Kitco News) - Gold prices are slightly down but well up from daily lows in midday U.S. trading Wednesday. Some profit taking from the shorter-term futures traders and chart consolidation are featured after prices hit 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 $1.10 an ounce at 1,417.60. July Comex silver prices were last up $0.015 at $15.315 an ounce.

There were no major news developments Wednesday, which also allowed the gold market to pause.

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 solidly higher, at a four-week high, and trading around $59.50 a barrel. Meantime, the U.S. dollar index is weaker. The USDX hit a three-month low Tuesday. 

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures prices closed near mid-range. The bulls still have the solid overall near-term technical advantage amid a steep four-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,400.00. First resistance is seen at today’s high of $1,427.90 and then at this week’s high of $1,442.90. First support is seen at $1,410.00 and then at this week’s low of $1,413.60. Wyckoff's Market Rating: 8.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures prices closed nearer the session high today. The silver 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 the March high of $15.73 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.75. 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.

July N.Y. copper closed down 225 points at 271.30 cents today. Prices closed nearer the session low on profit taking after hitting a five-week high early on today. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 285.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the June low of 259.95 cents. First resistance is seen at today’s high of 277.15 cents and then at 277.50 cents. First support is seen at this week’s low of 268.00 cents and then at 265.00 cents. Wyckoff's Market Rating: 5.0.

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.