Powerful gold bulls eye $2,100, and beyond
(Kitco News) - Gold prices are again sharply higher and hit a record high of $2,070.00, basis October Comex futures, in midday U.S. trading Thursday. Silver prices are also sharply up and hit a more-than-seven-year high of $28.54, basis September Comex futures. October gold futures were last up $25.00 an ounce at $2,062.10. September Comex silver prices were last up $1.55 at $28.44 an ounce.
Both metals see no early chart clues that major market tops are close at hand. Thus, the path of least resistance for prices remains sideways to higher. Importantly, however, while there are no early chart clues to suggest the gold and silver markets are topping out, both are now short-term overbought, technically, and are due for normal downside corrections in the uptrends. And remember that with the higher volatility and bigger daily price gains seen at present, there will also be bigger downside corrections when they come—yet prices will still be in strong uptrends on the charts.
Global stock markets were mixed in overnight trading. The U.S. stock indexes are slightly higher in midday New York trading. U.S. equities traders remain upbeat due in part to notions the U.S. Congress will soon come through with a new stimulus package for Americans dealing with the economic hardship of the Covid-19 pandemic.
Traders today closely examined the weekly U.S. jobless claims report, which came in at 1.1 million new claims, which is less than the 1.4 million expected. Today’s report is considered somewhat upbeat, amid notions the U.S. economic recovery is slowing down.
The Bank of England left is monetary policy unchanged at its regular meeting today, with the BOE saying negative interest rates may not be the right tool for spurring economic growth in the U.K. economy.
The U.S.-China political tensions remain near a boil, as U.S. Secretary of State Pompeo has urged Americans not to use technology products owned by China, including Alibaba, Huawei, Tencent and Baidu.
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 near steady and trading around $42.25 a barrel. The U.S. dollar index is slightly lower today and hit a two-year low. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.526% and near a record low.
Technically, October gold futures bulls have the strong overall near-term technical advantage, to suggest still more upside in the near term. However, the market is due for a normal downside correction soon. Prices are in an accelerating two-month-old uptrend on the daily bar chart. Gold bulls' next upside near-term price objective is to produce a close above technical resistance at $2,100.00. Bears' next near-term downside price objective is pushing prices below solid technical support at $2,000.00. First resistance is seen at $2,070.00 and then at $2,100.00. First support is seen at today’s low of $2,037.20 and then at $2,015.50. Wyckoff's Market Rating: 10.0
September silver futures bulls have the strong overall near-term technical advantage. However, the market is now due for a normal corrective pullback soon. Prices are in a 4.5-month-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $30.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $28.54 and then at $29.00. Next support is seen at $28.00 and then at $27.50. Wyckoff's Market Rating: 10.0.
September N.Y. copper closed down 65 points at 291.05 cents today. Prices closed near mid-range today. The copper bulls have the overall near-term technical advantage. However, a 4.5-month-old uptrend on the daily bar chart is in jeopardy. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 275.00 cents. First resistance is seen at this week’s high of 293.95 cents and then at 295.00 cents. First support is seen at today’s low of 288.60 cents and then at 285.00 cents. Wyckoff's Market Rating: 7.5.