Gold, silver see slight gains as bulls buy the early dip
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(Kitco News) Gold and silver prices are slightly up in midday U.S. trading Thursday, as bullish traders stepped in to buy the earlier dip in prices. The technical charts remain firmly tilted in favor of the gold and silver market bulls. June gold futures were last up $2.60 at $1,884.10 and July Comex silver was last up $0.05 at $28.075 an ounce.
U.S. stock indexes are higher at midday. There is still a bit of risk aversion in the overall marketplace late this week. Traders and investors are debating when the Federal Reserve will rein in its very easy monetary policy, following the FOMC minutes on Wednesday afternoon that contained included wording on the FOMC committee discussing tapering its bond-buying program when economic conditions warrant such—but not yet. At the last FOMC meeting in late April the Fed still believed rising inflation was transitory. And price action this week in several raw commodity markets makes the case for the Fed being correct on that assumption. Crude oil prices have backed well down from a two-month high scored earlier this week, copper prices have pulled back from a 10-year high and the grain futures markets have swooned. Iron ore prices in Asia are also dropping, while U.S. lumber futures have dropped over 25% from their highs seen recently. Still, there are many veteran market watchers, including this one, that believe the inflation genie is already out of the bottle, to suggest generally rising consumer and producer prices for some time to come—and likely inflation that is problematic.
Bitcoin and other crypto currencies stabilized Thursday after a huge sell off Wednesday that was precipitated by China stating it will not allow payment for goods and services to be conducted with Bitcoin. Wednesday’s price action in cryptos reminds of the time-tested notion that major bull markets many times end when the rules of the game are changed. The crypto world should indeed shudder when the globe’s largest population and second-largest economy that is state-controlled sees its leadership take a major step toward nullifying cryptos’ authenticity.
The key outside markets today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are lower and are trading around $62.50 a barrel. Crude oil has sold off sharply this week, in part on reports heretofore sanctioned Iranian crude oil may be coming back onto the world market. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around
Technically, June gold futures prices Wednesday hit a 4.5-month high. The gold bulls have the firm overall near-term technical advantage. A seven-week-old price uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,808.40. First resistance is seen at this week’s high of $1,891.30 and then at $1,900.00. First support is seen at today’s low of $1,864.20 and then at Wednesday’s low of $1,852.20. Wyckoff's Market Rating: 7.0
July silver futures prices hit a 3.5-month high Tuesday. The silver bulls have the firm overall near-term technical advantage. A seven-week-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.015 an ounce. The next downside price objective for the bears is closing prices below solid support at last week’s low of $26.78. First resistance is seen at Wednesday’s high of $28.365 and then at this week’s high of $28.90. Next support is seen at this week’s low of $27.425 and then at $27.00. Wyckoff's Market Rating: 7.0.
July N.Y. copper closed down 85 points at 456.85 cents today. Prices closed near mid-range today and hit a two-week low. The copper bulls still have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the May high of 488.80 cents. The next downside price objective for the bears is closing prices below solid technical support at 437.00 cents. First resistance is seen at today’s high of 462.50 cents and then at 465.00 cents. First support is seen at today’s low of 452.65 and then at 450.00 cents. Wyckoff's Market Rating: 7.0.