Gold, Silver Prices Pop On Chart-Based Buying
(Kitco News) - Gold and silver prices are solidly higher in midday U.S. trading Wednesday. The two precious metals saw technical buyers pick up the pace today, amid charts that are turning more bullish, especially for silver, which hit a nearly four-month high today. August gold futures were last up $12.90 an ounce at 1,424.10. September Comex silver prices were last up $0.272 at $15.945 an ounce.
Gold prices were under some moderate selling pressure overnight and in early U.S. trading, but the bulls once again stepped in to buy the dip prices.
Metals traders were awaiting the afternoon beige book report from the Federal Reserve. That report is expected to lean easy on U.S. monetary policy. Recent comments from Federal Reserve Chairman Jerome Powell and other Fed officials have painted an accommodative picture for U.S. monetary policy in the coming months. This easy-money lean comes despite recent U.S. economic data that shows moderate expansion and low inflation. Fed officials, including Powell, have indicated they are more concerned about global economic growth stagnating, which would in turn be a drag on the U.S. economy. The Federal Open Market Committee (FOMC) meets on July 30-31, at which time most of the marketplace believes the Fed will lower U.S. interest rates. Somewhat surprisingly, the U.S. Treasury market the past couple weeks has seen bond and note yields rise, but this week they have backed off. Treasury yields should remain very low for quite some time, amid very low U.S. inflation amid moderate economic growth.
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 weaker, hitting a two-week low and trading around $57.00 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 down at midday after good gains posted Tuesday.
Technically, the gold bulls have the firm overall near-term technical advantage. Prices today scored a bullish “outside day” up on the daily bar chart. 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 $1,429.40 and then at the June high of $1,442.90. First support is seen at $1,415.00 and then at $1,410.00. Wyckoff's Market Rating: 7.5
September silver futures bulls have the firm 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 this year’s high of $16.47 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 $16.00 and then at $16.15. Next support is seen at $15.75 and then at the overnight low of $15.555. Wyckoff's Market Rating: 7.0.