Gold, silver slip on profit taking, weak long liquidation
(Kitco News) - Gold and silver futures markets are lower in midday U.S. trading Tuesday. Profit taking and selling from weak-handed long positions in the futures markets are featured today, amid upbeat trader and investor attitudes. October gold futures were last down $16.40 an ounce at $1,915.20. September Comex silver prices were last down $0.212 at $26.395 an ounce.
Global stock markets were mostly higher overnight. The U.S. stock indexes are mixed at midday but the S&P 500 index hit another record high today. The marketplace breathed a sigh of relief on upbeat news regarding U.S.-China trade talks. Senior trade officials on both sides held a videoconference Monday and reaffirmed the commitment to a partial trade deal agreed upon in January.
A positive German IFO business climate index report on Tuesday helped to boost the European stock indexes and the Euro currency. The main IFO index rose to 92.6 in August from 90.4 in July and also beat market expectations.
While new Covid-19 cases in the U.S. continue to stymie the world’s largest economy as it tries to regain momentum from the springtime lockdowns, reports say China, the world’s second-largest economy, is making rapid progress on restoring conditions to normal. Most agree that China’s more rapid recovery than the U.S. is due to China’s very strict lockdown and quarantine measures it mandated on its citizens. Still, reports also say China is quietly buying U.S. and other global food products to make up a huge shortfall caused by major flooding, and crop and infrastructure damage, along the Yangtze river. Some traders wonder if this situation could help to jumpstart price inflation in the raw commodity sector.
Traders and investors are looking forward to two big events this week: the U.S. Republican national convention in which President Trump will accept his party’s nomination, and the annual Federal Reserve Symposium that has been traditionally held in Jackson Hole, Wyoming but this year will be virtual. Fed Chairman Jerome Powell is scheduled to speak late this week during the event.
The important outside markets today see Nymex crude oil prices higher and trading around $43.25 a barrel. The hurricane in the Gulf of Mexico that is bearing down on the U.S. Gulf coast has pushed gasoline futures prices to a five-month high. The U.S. dollar index is slightly lower and not far above its recent two-year low. The yield on the U.S. Treasury 10-year note rose to 6.8% Tuesday, in another sign of rising confidence in the marketplace.
Technically, October gold futures bulls still have the firm overall near-term technical advantage. Prices are still in a five-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,865.00. First resistance is seen at this week high of $1,961.90 and then at $1,975.00. First support is seen at last week’s low of $1,909.60 and then at $1,900.00. Wyckoff's Market Rating: 7.0
September silver futures bulls still have the firm overall near-term technical advantage amid a five-month-old price uptrend in place on the daily bar chart. A bullish symmetrical triangle pattern has also formed on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $29.915 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at this week’s high of $27.34 and then at $28.00. Next support is seen at $26.095 and then at $26.00. Wyckoff's Market Rating: 7.0.
September N.Y. copper closed up 45 points at 293.10 cents today. Prices closed nearer the session high today. The copper bulls have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 310.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 276.90 cents. First resistance is seen at 300.00 cents and then at the August high of 302.95 cents. First support is seen at 290.00 cents and then at 285.00 cents. Wyckoff's Market Rating: 7.5.