Gold sees normal corrective action after 7.5-year high Wed.
(Kitco News) - Gold prices are modestly lower in midday U.S. trading Thursday, on a routine corrective pullback after pushing to a 7.5-year high of $1,796.10 Wednesday. Risk appetite is on the wane late this week and that’s still bullish for the safe-haven metals. August gold futures were last down $2.10 an ounce at $1,772.90. July Comex silver prices were last up $0.215 at $17.885 an ounce.
Global stock markets were mixed to lower in overnight trading. U.S. stock indexes are mixed at midday and well off their session lows, following strong losses Wednesday. The Covid-19 pandemic appears to be spreading at a more alarming rate again in many countries, including the U.S. That has sapped trader and investor confidence late this week.
Many health experts are saying two months of progress in the U.S. has been thrown out the window because businesses opened up too early and Americans are not being vigilant enough because they got “Covid-fatigue.” It seems unlikely the U.S. will get locked down to the degree seen in the spring. Still, the worrisome rise in infections the past couple weeks could bring a halt to the rapid U.S. economic recovery seen since businesses started reopening. That is what has the U.S. stock indexes selling off.
Another concern for the marketplace is rumblings the U.S. could implement more trade tariffs against the European Union and the U.K. The U.S. and China (the world’s two largest economies) already have strained relations on trade and other matters.
There is also trader talk the marketplace is beginning to sense President Trump is in real danger of losing his re-election bid in November. A win by the Democrat, Joe Biden, would probably see corporate and wealthy American tax increases as well as more regulations on businesses—bearish for the stock market.
The important outside markets today see Nymex crude oil prices firmer and trading around $38.70 a barrel. The U.S. dollar index is higher at midday but off its early highs. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
It was a busy day for U.S. economic data Thursday, including the weekly jobless claims report and the third estimate for first-quarter gross domestic product. However, those reports contained no big surprises and failed to significantly move gold and silver prices.
Technically, August gold futures bulls still have the solid overall near-term technical advantage. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at $1,800.00. Bears' next near-term downside price objective is pushing prices below solid technical support at this week’s low of $1,753.50. First resistance is seen at $1,789.00 and then at this week high of $1,796.10. First support is seen at today’s low of $1,764.10 and then at Tuesday’s low of $1,758.30. Wyckoff's Market Rating: 8.0
July silver futures bulls have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $19.075 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $18.00 and then at this week’s high of $18.255. Next support is seen at this week’s low of $17.425 and then at $17.25. Wyckoff's Market Rating: 7.0.
July N.Y. copper closed up 115 points at 266.10 cents today. Prices closed near the session high today. The copper bulls have firm 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 250.00 cents. First resistance is seen at this week’s high of 268.45 cents and then at 270.00 cents. First support is seen at today’s low of 262.85 cents and then at this week’s low of 259.50 cents. Wyckoff's Market Rating: 7.0.