Gold, silver suffer steep corrective pullbacks
(Kitco News) - Gold and silver prices are sharply lower in midday U.S. trading Tuesday. Gold has fallen back below $2,000. Traders and investors put risk back on the table Tuesday, due in part to news overnight that Russia has approved a Covid-19 vaccine. Russian President Vladimir Putin told reporters the vaccine has been given to his daughter. However, global health experts are very skeptical and cautioning that the Russian vaccine is premature because it has not gone through full trials that the U.S. and other countries require for approval. October gold futures were last down $85.20 an ounce at $1,945.10. September Comex silver prices were last down $2.571 at $26.685 an ounce.
As I said in my Kitco Special Report I put out earlier today, which included longer-term weekly charts on gold and silver: On a day when gold prices were down around $85 an ounce on the day and silver down over $2, many precious metals market bulls may be squeamish, wondering, “Are market tops in place?” Of course nobody knows the answer to that question and there are all kinds of opinions and speculation about that topic—especially today.
The prudent trader and investor should look at some price perspectives from action seen over the last few months, to get a bigger- picture view of where prices have been and where they may be going. On the weekly continuation charts for nearby Comex gold and silver futures markets, prices remain in strong longer-term uptrends, and from a weekly chart perspective today’s losses don’t appear extreme. That’s because gold and silver prices have seen major appreciation over the past few months and from a longer-term technical perspective today’s declines are hardly a minor speed bump.
Still, trading the rest of this week will be extra critical for both gold and silver markets. How the markets close on Friday will be very telling. If gold and silver futures prices close on Friday at or near their weekly lows, then such would be a significant early clue these markets have put in at least near-term tops. If the markets can recover over the next few days and finish the week well off of their weekly lows, bulls could be back in business soon.
Global stock markets rallied Tuesday and the U.S. stock indexes are higher at midday. Besides the Russian Covid vaccine news, there are reports the U.S. Congress and President Trump may be inching a bit closer to agreeing upon a new government stimulus package for Americans, and that’s also a positive for marketplace sentiment. Also, the new Covid-19 cases in the U.S. are starting to drop just a bit.
The important outside markets today see Nymex crude oil prices slightly firmer and trading around $42.00 a barrel. The U.S. dollar index is modestly down. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.6%.
Technically, October gold futures are seeing the first big downside correction gold has seen during this big bull run. No chart major damage has been inflicted so far but more strong selling pressure this week would likely damage the charts. Prices just last Friday hit a record high of $2,078.00. The bulls still have the solid overall near-term technical advantage. Prices are still in a 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 the record high of $2,078.00. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,900.00. First resistance is seen at $1,986.00 and then at $2,000.00. First support is seen at today’s low of $1,939.30 and then at $1,912.00. Wyckoff's Market Rating: 8.0
September silver futures prices were near the session low at midday. Prices just last Friday hit a more-than-seven year high of $29.915. Today’s price action is so just a big downside correction in an uptrend. No chart major damage has been inflicted yet, but more strong selling pressure this week would likely damage the charts. The bulls still have the solid overall near-term technical advantage. Prices are still in a nearly five-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 $27.50 and then at $28.00. Next support is seen at $26.50 and then at $26.00. Wyckoff's Market Rating: 8.0.
September N.Y. copper closed up 135 points at 287.50 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. However, a 4.5-month-old uptrend on the daily bar chart has been negated. 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 270.00 cents. First resistance is seen at Monday’s high of 288.50 cents and then at last week’s high of 293.95 cents. First support is seen at today’s low of 283.90 cents and then at 280.00 cents. Wyckoff's Market Rating: 7.0.