Gold price powers to record high, more upside likely
(Kitco News) - Gold prices are sharply higher in early U.S. trading Monday and hit a new record high of $1,941.90, basis nearby Comex futures. The previous record was $1,920.70 scored in 2011. The next upside price objective for the very powerful gold market bulls is $2,000. Meantime, silver futures hit a seven-year high of $24.82 in overnight trading. August gold futures were last up $38.60 an ounce at $1,935.70. September Comex silver prices were last up $1.66 at $24.51 an ounce.
The feature in the global marketplace to start the trading week is gold and silver prices surging. A continued worrisome rise in Covid-19 infections in major industrialized countries, a new U.S. government stimulus package totaling $1 trillion, a slumping U.S. dollar index that hit a nearly two-year low overnight, rising U.S.-China trade tensions, and a big surge in buying of gold-back exchange traded funds, including the Robinhood platform, are propelling the safe-haven metals sharply higher. Said one broker in a morning email dispatch: “Investors see holding gold as offering less risk than other instruments while enjoying upside momentum.”
Global stock markets were mixed in overnight trading. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins. U.S. shares are boosted in part on weekend news that a $1 trillion U.S. government economic stimulus plan is moving through the legislative process more quickly than expected.
The Federal Reserve’s Open Market Committee (FOMC) will meet Tuesday and Wednesday to discuss U.S. monetary policy. No changes in policy are expected but the Fed is expected to reiterate U.S. interest rates will remain low for a long time amid the challenges of dealing with the pandemic.
The important outside markets today see Nymex crude oil prices firmer and trading around $41.50 a barrel. The U.S. dollar index is solidly down and hit a nearly two-year low overnight. The yield on the benchmark U.S. Treasury 10-year note is currently dipping a bit and trading around the 0.58% level.
U.S. economic data due for release Monday includes durable goods orders and the Texas manufacturing outlook survey.
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 $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,941.90 and then at $1,975.00. First support is seen at the overnight low of $1,899.00 and then at $1,880.50. Wyckoff's Market Rating: 10.0
September silver futures bulls have the strong overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $22.00. First resistance is seen at the overnight high of $24.82 and then at $25.00. Next support is seen at $24.00 and then at the overnight low of $22.94. Wyckoff's Market Rating: 9.5.