Gold Languishing, But Silver Bulls On The March
(Kitco News) - Gold prices are moderately lower in early U.S. trading Wednesday. The yellow metal is drifting sideways on the daily chart amid summertime doldrums. However, the silver market has taken off this week as prices Tuesday hit a nearly four-month high and an uptrend is now in place on the daily chart. August gold futures were last down $5.10 an ounce at 1,405.10. September Comex silver prices were last up $0.032 at $15.71 an ounce.
Asian and European stocks were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session beings, and are at or near their record and contract highs scored this week.
The important U.S. economic data point at mid-week is the afternoon beige book report from the Federal Reserve. It’s expected the report will lean dovish on U.S. monetary policy, given recent comments from Fed officials, including Chairman Jerome Powell. The Federal Open Market Committee (FOMC) meets on July 30-31.
In overnight news, the Euro zone consumer price index for June came in at up 0.2% from May and up 1.3%, year-on-year. Those numbers were just a bit above market expectations but still underscore the very low inflation in the major world economies. In fact, the German government auctioned a 30-year bond today, which fetched a yield of only 0.3%.
The key “outside markets” today see Nymex crude oil prices firmer and trading just below $58.00 a barrel. The oil market took a hit late Tuesday on reports that Iran may want to negotiate with the U.S. regarding U.S. sanctions on Iran. Meantime, the U.S. dollar index is slightly down after good gains posted Tuesday.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the beige book, new residential construction, and the weekly DOE liquid energy stocks report.
Technically, the gold bulls still have the firm overall near-term technical advantage. A seven-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 the July low of $1,384.70. First resistance is seen at this week’s high of $1,421.60 and then at $1,425.00. First support is seen at $1,400.00 and then at $1,390.00. Wyckoff's Market Rating: 7.0
September silver futures bulls have the overall near-term technical advantage and have momentum on their side. 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 the July low of $14.915. First resistance is seen at Tuesday’s high of $15.735 and then at $15.835. Next support is seen at the overnight low of $15.55 and then at $15.34. Wyckoff's Market Rating: 6.5.