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Gold prices gain as risk aversion upticks late this week

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(Kitco News) -  Gold and silver prices are trading moderately higher in early U.S. trading Thursday, as safe-haven demand has returned to the metals after a brief absence. Souring China-U.S. relations are back on the front burner of the market place. August gold futures were last up $10.70 an ounce at $1,737.50. July Comex silver prices were last up $0.108 at $17.86 an ounce.

Global stock markets were mixed in overnight trading, with European shares mostly higher and Asian shares mostly lower. U.S. stock indexes are also pointed toward mixed openings when the New York day session begins. There is a bit more risk aversion in the marketplace Thursday, as China’s government has ratified what is calls a national security law that ostensibly tightens mainland China’s grip on Hong Kong. The move has further angered the U.S. as relations between the two largest economies in the world continue to deteriorate. The U.S. Secretary of State on Wednesday said Hong Kong was no longer autonomous from China, implying the U.S. may revoke Hong Kong’s favorable trade status. Such would have big implications for the many major U.S. companies doing business in Hong Kong. The U.S. House of Representatives Wednesday passed a bill that would sanction China for its oppression of minority groups.

The important outside markets see the U.S. dollar index weaker early today. Nymex crude oil prices are lower and trading around $32.15 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.7%.  

U.S. economic data due for release Thursday includes the weekly jobless claims report, expected to show a new claims of around 2 million; the second estimate of first-quarter GDP, durable goods orders, the weekly DOE liquid energy stocks report, the Kansas City Fed manufacturing survey, and pending home sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the firm overall near-term technical advantage but a price uptrend on the daily bar chart is still in some jeopardy and the bulls need to show more power soon to keep it alive. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at the April high of $1,789.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,668.40. First resistance is seen at the overnight high of $1,741.90 and then at this week’s high of $1,755.60. First support is seen at the overnight low of $1,720.00 and then at this week’s low of $1,701.60. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have the firm overall near-term technical advantage. A bull flag has formed on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $19.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $18.00 and then at the May high of $18.165. Next support is seen at $17.50 and then at this week’s low of $17.225. Wyckoff's Market Rating: 7.0.

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.