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Gold prices move up as China retaliates on trade; Powell speech awaited

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(Kitco News) - Gold prices are moderately higher and have erased modest overnight losses in early U.S. trading Friday. News just out that China plans to retaliate against the recently announced U.S. trade tariffs by slapping its own tariffs on U.S. goods coming into China has quickly sapped trader and investor risk appetite, and in turn boosted safe-haven gold. December gold futures were last up $4.50 an ounce at 1,513.00. September Comex silver prices were last up $0.075 at $17.115 an ounce.

U.S. stock indexes sold off on the China tariff announcement, while U.S. Treasury prices moved well off their overnight lows.

The China news has at least temporarily overshadowed what was expected to be the economic highlight of the week: Friday morning’s 10:00 a.m. EDT speech by Federal Reserve Chairman Jerome Powell, at the Kansas City Fed’s symposium in Jackson Hole, Wyoming. The Fed was deemed by the marketplace to be leaning significantly easy on their monetary policy, until late this week. Comments from Fed officials at the Jackson Hole confab appear to be walking back notions the Fed will embark on a series of interest rate cuts in the coming months. Traders hope Powell will provide more clarity on the Fed’s monetary policy intentions.

Traders and investors are also wondering how the weekend will turn out, regarding civil unrest in Hong Kong. An escalation in the situation would significantly impact markets and prompt risk aversion early next week. So far this week, risk aversion has receded from levels seen the past couple weeks.

The key “outside markets” today see Nymex crude oil prices lower and trading around $54.75 a barrel. The U.S. dollar index is higher and at a new high for the week.

U.S. economic data due for release Friday includes new residential sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage. A 2.5-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at the August high of $1,546.10. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,488.90. First resistance is seen at $1,518.40 and then at this week’s high of $1,523.60. First support is seen at this week’s low of $1,502.10 and then at $1,500.00. 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. Prices are in a 2.5-month-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the August high of $17.49 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.51. First resistance is seen at this week’s high of $17.175 and then at $17.25. Next support is seen at $16.915 and then at this week’s low of $16.82. Wyckoff's Market Rating: 7.5.

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.