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Gold prices see some normal profit taking, consolidation

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(Kitco News) - Gold prices are moderately lower in early U.S. trading Wednesday, on a routine, profit-taking downside correction in an overall near-term uptrend. Meantime, silver prices are higher, hit another three-year high and are closing in on $20 an ounce. December gold futures were last down $7.70 an ounce at 1,548.20. December Comex silver prices were last up $0.263 at $19.495 an ounce.

Asian and European stock markets mostly higher overnight. U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins. Traders and investors around the globe were cheered today when Hong Kong’s leader withdrew from consideration a proposed law that would allow the extradition of Hong Kong citizens to mainland China for criminal trials. This proposed new law had been one of the reasons for the major protesting seen in Hong Kong the past few months. However, it’s too early to determine if this reversal of Hong Kong’s leader on the matter will be enough to quell the civil unrest.

The China-U.S. trade war remains on the front burner of the world marketplace, and has escalated in recent days.

The leader of the International Monetary Fund, Christine Lagarde, said Wednesday the European Central Bank needs an accommodative monetary policy for a period of time due to threats on the horizon. This comes after the Euro zone reported its retail sales for July fell 0.6% from June.

Meantime, the U.K. economy could be tipping into recession amid the Brexit turmoil. Purchasing managers’ data for August, released today, was weaker than in July. The British pound this week hit a more-than-30-year low against the U.S. dollar.

The key “outside markets” today see Nymex crude oil prices higher and trading around $54.50 a barrel. The U.S. dollar index is lower on a normal downside correction after hitting a 27-month high Monday.

U.S. economic data due for release Wednesday includes the Federal Reserve’s beige book, weekly MBA mortgage applications survey, the weekly Johnson Redbook and Goldman Sachs retail sales reports, the international trade report, the ISM New York report on business, and the IDB-TIPP economic optimism index.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage. A three-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 $1,600.00. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,500.00. First resistance is seen at $1,550.00 and then at the overnight high of 1,559.20. First support is seen at the overnight low of $1,542.60 and then at $1,535.00. Wyckoff's Market Rating: 8.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls have the strong overall near-term technical advantage. Prices are in an accelerating three-month-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $17.64. First resistance is seen at the overnight high of $19.69 and then at $20.00. Next support is seen at the overnight low of $19.28 and then at $19.00. Wyckoff's Market Rating: 8.5.

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