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Gold Bulls Bounce Back, Suggesting More Upside

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(Kitco News) - Gold prices are solidly higher in midday U.S. trading Wednesday, with prices coming close to taking out the recent six-year high. Gold is seeing some renewed safe-haven demand, fresh chart-based buying and support coming from ongoing notions of easier central bank monetary policies. August gold futures were last up $12.00 an ounce at $1,419.90. September Comex silver prices were last up $0.097 at $15.335 an ounce.

This week’s rebound in gold prices puts the bulls back in good shape on the charts, suggesting still more upside in the near term.

Many U.S. markets closed early today and all will be close on Thursday, in observance of the U.S. Independence Day holiday.

Today’s U.S. ADP national employment report for June was a solid miss to the downside at up 102,000 jobs, which was about 40,000 below market expectations for a rise of around 160,000. This downbeat report helped to push gold back closer to overnight highs. Traders and investors are looking ahead to Friday morning’s more important June U.S. jobs report from the Labor Department. The key non-farm payrolls number of the report is expected to show a rise of 165,000. But the weaker ADP number today has many thinking Friday’s non-farms number will also be a downside miss.

Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Look for trading activity in the U.S. to tail off quickly today, ahead of the U.S. Independence Day holiday on Thursday, when U.S. markets are closed. However, today is a very busy day for U.S. economic data releases.

European stock markets and the metals markets were buoyed by news the International Monetary Fund’s Christine Lagarde has been nominated to be the next president of the European Central Bank. Lagarde is considered a monetary policy dove, like current ECB president Mario Draghi.

President Trump late Tuesday said he will nominate a couple of likely dovish candidates to serve on the Federal Reserve Board.

The yield on the German 10-year government bond (bund) dropped to another record low Wednesday, at minus 0.394%.

The key “outside markets” today see Nymex crude oil prices moderately up and trading around $56.75 a barrel. Meantime, the U.S. dollar index is slightly higher in midday U.S. trading. 

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the firm overall near-term technical advantage and have regained power. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at the June 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 $1,430.00 and then at $1,442.90. First support is seen at today’s low of $1,417.80 and then at $1,410.00. Wyckoff's Market Rating: 7.5.

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the slight overall near-term technical advantage. Prices are in a five-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 $14.70. First resistance is seen at the overnight high of $15.51 and then at the June high of $15.625. Next support is seen at this week’s low of $15.07 and then at $15.00. Wyckoff's Market Rating: 5.5.

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