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Gold price pushes well above $2,000, much more upside possible

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(Kitco News) Gold prices are sharply higher and hit a record high of $2,048.00, basis October Comex futures, in early U.S. trading Wednesday. Silver prices are also sharply higher and hit a seven-year high of $27.195, basis September Comex futures. October gold futures were last up $35.00 an ounce at $2,043.50. September Comex silver prices were last up $0.987 at $27.03 an ounce. 

Gold and silver are continuing on a bullish rampage. Both metals continue to see support from safe-haven demand amid the worrisome rise in Covid-19 infections, geopolitical developments and concerns about problematic price inflation in the coming months. As the U.S. Congress appears to be getting closer to a new round of government stimulus payments to Americans, such would only add to the massive influx of liquidity into the world financial system, which has created the inflation concerns.

Global stock markets were mostly up in overnight trading. The U.S. stock indexes are pointed toward higher openings when the New York day session begins, including a new record high in the Nasdaq stock index. Hopes of a new U.S. government stimulus package for Americans coming soon are rising at mid-week on reports Democrats and Republicans are coming closer to agreement on a package. Rising crude oil prices that hit a five-month high overnight are also giving traders and investors a boost.

On tap Wednesday is the ADP national employment report for July, which is expected to show U.S. jobs growth of around 1 million. This report could move the markets when it’s released at 8:30 a.m. EDT.

The key U.S. data point of the week will be Friday’s jobs report for July from the Labor Department. The non-farm payrolls number is forecast to be up by around 1.25 million after rising by 4.8 million in June. However, don’t be surprised to see a miss from the forecasts, to likely move the markets.

The important outside markets today see Nymex crude oil prices higher, hitting a five-month high and trading around $42.75 a barrel. The U.S. dollar index is solidly lower today. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.52% and near a record low.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP jobs report, the international trade report, the U.S. services PMI, the global services PMI, the ISM report on business services, and the weekly DOE liquid energy stocks report.

Technically, the gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at the overnight high of $2,048.00 and then at $2,075.00. First support is seen at the overnight low of $2,015.50 and then at $2,000.00. Wyckoff's Market Rating: 10.0

Live 24 hours gold chart [Kitco Inc.]

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 $28.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $24.16. First resistance is seen at the overnight high of $27.195 and then at $27.50. Next support is seen at $26.00 and then at the overnight low of $25.64. Wyckoff's Market Rating: 9.5. 

Live 24 hours silver chart [ Kitco Inc. ]

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