Gold prices slightly down as risk appetite remains keener
(Kitco News) - Gold prices are mildly lower in midday U.S. trading Wednesday, as global equity markets have jumped back into rally modes following last week’s pullbacks. That’s negative for safe-haven gold and silver markets. August gold futures were last down $1.10 an ounce at $1,735.40. July Comex silver prices were last up $0.093 at $17.745 an ounce.
Global stock markets were mostly up in overnight trading. U.S. stock indexes are narrowly mixed at midday. Traders and investors are weighing the bullish aspects of generally faster rebounds in world economies than many had expected versus the bearish element of a resurgence in Covid-19 reported cases in some regions of the globe, including some U.S. states. At present, it appears the global economic growth factor is winning out. Skeptics can argue the rally in world stock markets is mainly due to the floods of central-bank infused cash that have hit the global financial system.
In overnight news, the Euro zone May consumer price index came out at -0.1% from April and up 0.1%, year-on-year. Deflationary concerns are still at the forefront for central bankers. However, a Wall Street Journal article at mid-week is headlined “Few Are Prepared for the Risk of Inflation Era After Recession.” The story says the 2008 financial crisis and the big influx of central bank liquidity into the financial systems then produced no problematic inflation. However, the article says things are different now and at present “the markets may have it completely wrong” on the inflation matter.
There are a couple of geopolitical developments that bear watching. North Korea has ramped up its provocation of South Korea in recent days. Also, a clash between Indian and Chinese soldiers in their border region is the first military conflict between the two nations in decades.
Fed Chairman Jerome Powell on Wednesday is offering up his second and final day of testimony to the U.S. Congress on the health of the U.S. economy and its recovery prospects. His comments so far today produced no significant surprises or markets reaction.
The important outside markets early today see the U.S. dollar index firmer. Meantime, Nymex crude oil prices are lower and trading around $38.15 a barrel. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.75% level.
Technically, August gold futures bulls still have the firm overall near-term technical advantage but trading has returned to a choppy and sideways pattern at higher levels. Longer term, such action could be storing energy for another leg up in prices in the coming weeks or months. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at $1,761.00. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,700.00. First resistance is seen at this week’s high of $1,743.80 and then at $1,750.00. First support is seen at today’s low of $1,717.30 and then at this week’s low of $1,706.20. Wyckoff's Market Rating: 7.0
July silver futures bulls have the overall near-term technical advantage as trading turns choppy. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $19.075 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 today’s high of $17.79 and then at $18.00. Next support is seen at Tuesday’s low of $17.465 and then at $17.25. Wyckoff's Market Rating: 6.5.
July N.Y. copper closed up 225 points at 258.70 cents today. Prices closed near the session high today. The copper bulls have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the June high of 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 240.00 cents. First resistance is seen at this week’s high of 261.50 cents and then at 263.00 cents. First support is seen at this week’s low of 253.10 cents and then at 250.00 cents. Wyckoff's Market Rating: 6.5.