Gold hits 8.5-yr high, backs off on profit taking
(Kitco News) - Gold prices are sharply lower at midday after overnight hitting another 8.5-year high. So far, just some more normal profit taking by the shorter-term futures traders is featured Wednesday. Don’t be surprised to see bulls on Friday once again step in to buy the dip in a technically still very strong market. August gold futures were last down $24.00 an ounce at $1,776.60. September Comex silver prices were last down $0.427 at $18.21 an ounce.
Global stock markets were mixed to mostly up in overnight trading as the second half of 2020 gets under way. The U.S. stock indexes are mixed at midday after posting the best quarterly performance in 20 years in the second quarter. While the U.S. stock indexes are still in lofty positions there remain storm clouds on the horizon. The Covid-19 pandemic has hit the U.S. harder than most other countries and continues to spread at an alarming rate. The top Trump administration infectious disease expert said the pandemic progress in the U.S. is “going in the wrong direction” and said new cases could hit 100,000 a day if U.S. citizens don’t use better prevention methods. The U.S. is now reporting about 40,000 cases a day.
It's a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. However, the next two days will be very busy for U.S. economic data releases that are likely to move markets. Today’s ADP national employment index report showed a rise of 2.369 million jobs in June, which was slightly below market expectations. Markets showed little reaction to the news. The FOMC minutes from the last Fed meeting are out Wednesday afternoon and could move the markets. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%. A slew of other important U.S. economic reports is also out on Thursday.
The important outside markets today see Nymex crude oil prices higher and trading around $39.70 a barrel. The U.S. dollar index is lower at midday today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
Technically, August gold futures prices were nearer the session low at midday. Prices were also scoring a bearish “outside day” down on the daily bar chart, and if there would be good follow-through selling pressure on Thursday then a more significantly bearish “key reversal” down would be confirmed, which would be one chart clue that a near-term market top is in place. But right now the bulls have the solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price objective is to produce a close above strong technical resistance at today’s high of $1,807.70. Bears' next near-term downside price objective is pushing prices below solid technical support at last week’s low of $1,754.00. First resistance is seen at $1,789.00 and then at $1,800.00. First support is seen at today’s low of $1,767.90 and then at $1,754.80. Wyckoff's Market Rating: 8.0
September silver futures were nearer the session low at midday on profit taking after hitting a four-week high overnight. The silver 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 $19.125 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the June low of $17.175. First resistance is seen at $18.50 and then at today’s high of $18.85. Next support is seen at $18.00 and then at $17.75. Wyckoff's Market Rating: 7.0.
September N.Y. copper closed up 50 points at 273.35 cents today. Prices closed nearer the session high today and hit another five-month high. The copper bulls have the solid overall near-term technical advantage. Prices are in a 3.5-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 285.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 260.00 cents. First resistance is seen at today’s high of 275.55 cents and then at 277.50 cents. First support is seen at 270.00 cents and then at this week’s low of 266.80 cents. Wyckoff's Market Rating: 7.5.