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Gold Prices Solidly Up As ECB Leans Easy

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(Kitco News) - Gold prices are solidly higher in early U.S. trading Thursday and extended overnight gains following the conclusion of the monetary policy meeting of the European Central Bank that traders deemed dovish. Gold and silver charts are fully bullish, which continues to invite traders to the long side of the markets. August gold futures were last up $8.20 an ounce at 1,431.70. September Comex silver prices were last down $0.001 at $16.625 an ounce.

The European Central Bank left interest rates unchanged Thursday, but policymakers said they envision a “highly accommodative stance of monetary policy for a prolonged period of time.” The ECB Governing Council left the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility at 0.00%, 0.25% and minus 0.40% respectively. Officials did not push out the length of time that interest rates are expected to remain low. The Governing Council said it “expects the key ECB interest rates to remain at their present or lower levels at least through the first half of 2020, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to its aim over the medium term.”

Next week, the U.S. Federal Reserve’s Open Market Committee (FOMC) has its money policy meeting, and is expected to ease monetary policies at the meeting.

Slowing global economic growth has the central bankers worried. There was another downbeat report coming out of Germany today, as the Ifo business climate index fell in July.

Asian and European stocks were mostly up overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session beings. Global equity markets have been boosted recently by notions of easier monetary policies coming soon from the major central banks of the world. Some progress on the U.S.-China trade front this week is also bullish for world stocks.

The key “outside markets” today see Nymex crude oil prices higher and trading around $56.50 a barrel. Meantime, the U.S. dollar index is firmer and near this year’s high.   

U.S. economic data due for release Thursday includes the weekly jobless claims report, the advance economic indicators report, durable goods orders, and the Kansas City Federal Reserve manufacturing survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage. A two-month-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 $1,500.00. 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 $1,442.00 and then at $1,450.00. First support is seen at the overnight low of $1,421.80 and then at this week’s low of $1,414.60. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.625. First resistance is seen at this week’s high of $16.68 and then at $16.75. Next support is seen at the overnight low of $16.46 and then at $16.25. Wyckoff's Market Rating: 8.0.

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.