Modest price gains for gold, bulls remain in firm control
(Kitco News) - Gold prices are modestly up in early morning U.S. trading Tuesday, as the sellers remain constrained by the bullish technical chart postures in place for both gold and silver. However, the buyers of the safe-haven metals are still tentative at present amid little risk aversion in the global market place. August gold futures were last up $2.70 at $1,900.30 and July Comex silver was last down $0.113 at $27.90 an ounce.
Global stock markets were mixed in quiet overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. Risk aversion in the marketplace is scant at present, amid no major geopolitical developments in play.
In overnight news, the Euro zone economy shrank by 0.3% in the first quarter of this year versus the fourth quarter of last year.
Traders are awaiting the U.S. economic data point of the week, which will be Thursday morning’s consumer price index report for May, which is expected to come in at up 0.5% from April and up 4.7%, year-on-year. Traders and investors continue their buzz regarding the prospects for inflation to heat up to uncomfortable levels in the coming months. Rising raw commodity prices the past few months are an ominous sign that inflation could become problematic.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $68.75 a barrel after hitting a 2.5-year high of $70.00 on Monday. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.553%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, the NFIB small business index, the international trade report, and weekly chain store sales.
Technically, August gold futures bulls have the firm overall near-term technical advantage amid a nine-week-old price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,950.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,912.30 and then at the June high of $1,919.20. First support is seen at Monday’s low of $1,883.70 and then at $1,866.70. Wyckoff's Market Rating: 7.0
The silver bulls have the overall near-term technical advantage but a two-month-old price uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at the May high of $28.90 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at the overnight high of $28.12 and then at $28.37. Next support is seen at Monday’s low of $27.595 and then at $27.31. Wyckoff's Market Rating: 6.5.