Make Kitco Your Homepage

Gold prices up as risk appetite recedes late this week

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - Gold prices are moderately higher in early U.S. trading Friday, as risk aversion is keener heading into the weekend. Gold and silver markets remain strongly bullish from a technical perspective, suggesting more upside for both. August gold futures were last up $8.00 an ounce at $1,811.80. September Comex silver prices were last up $0.128 at $19.09 an ounce.

Global stock markets were mostly lower in overnight trading, including in China, where an eight-session winning streak in the Shanghai composite index was halted Friday. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Trader and investor risk appetite has receded late this week, on growing ideas the U.S. and global economies’ heretofore rapid recoveries are now stalling out. More and more market participants are reckoning global stock markets have rallied too far, too fast, given current, general economic and business conditions.

Said one stock market analyst in a Friday morning email dispatch: “While global equities blissfully ignored the deteriorating economic conditions around the world in the previous quarter, the moment of reckoning could arrive when the U.S. earnings season kicks off next week. The second-quarter results are set to lay bare the pandemic’s impact to a greater extent compared to the previous quarter’s figures and this could prove to be one of Wall Street’s worst earnings seasons. It remains to be seen whether market participants have the stomach to digest such despairing numbers.”

One explanation for the global stock markets’ surprising strength in the face of the pandemic is the huge influx of stimulative cash from central banks that saw part of the cash flow into the stock markets.

The important outside markets today see Nymex crude oil prices lower and trading around $38.75 a barrel. The U.S. dollar index is slightly down early today. The yield on the benchmark U.S. Treasury 10-year note has dipped this week and is currently around the 0.58% level—the lowest since April. The increasing investor demand for U.S. Treasuries suggests “flight-to-quality” moves amid growing uneasiness in the marketplace.

U.S. economic data due for release Friday includes the producer price index.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,779.20. First resistance is seen at $1,825.50 and then at this week’s high of $1,829.80. First support is seen at $1,800.00 and then at $1,789.00. Wyckoff's Market Rating: 9.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price 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 $18.00. First resistance is seen at the overnight high of $19.185 and then at this week’s high of $19.445. Next support is seen at Thursday’s low of $18.83 and then at $18.585. Wyckoff's Market Rating: 8.0.

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.