Gold languishes amid scant risk aversion at present
(Kitco News) - Gold prices are seeing mild losses in late-morning U.S. trading Wednesday. Bullish technical chart postures remain in place for both metals and that’s keeping the markets afloat. However, the safe-haven metals bulls are timid amid little risk aversion in a quieter global marketplace. August gold futures were last down $1.60 at $1,891.40 and July Comex silver was last up $0.229 at $27.96 an ounce.
Global stock markets were mixed and mostly flat in overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The global marketplace is calm at present, amid no major geopolitical flareups in play. Remember that history shows the calm in a marketplace can quickly become disrupted.
In overnight news, China reported a big jump in price inflation Wednesday, with its producer price index rising 9% in May, year-on-year, after a surge of 6.8% in April. China’s consumer price index was tamer, with a May reading of up 1.3%, year-on-year. Rising inflationary pressures are a bullish element for the metals markets.
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.
Meantime, the European Central Bank holds its regular monetary policy meeting on Thursday.
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are near steady and trading around $70.00 a barrel after hitting a 2.5-year high of $70.62 overnight. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.514%.
Technically, August gold futures bulls still have the firm overall near-term technical advantage. A nine-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 the June high of $1,919.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,901.70 and then at this week’s high of $1,906.90. First support is seen at this week’s low of $1,883.70 and then at $1,866.70. Wyckoff's Market Rating: 7.0
July silver futures bulls have the overall near-term technical advantage. However, a nine-week-old uptrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing 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 today’s high of $28.145 and then at $28.37. Next support is seen at this week’s low of $27.595 and then at $27.31. Wyckoff's Market Rating: 6.5.
July N.Y. copper closed down 240 points at 453.20 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. However, a four-week-old downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 470.70 cents. The next downside price objective for the bears is closing prices below solid technical support at 425.00 cents. First resistance is seen at 460.00 cents and then at 462.50 cents. First support is seen at the June low of 442.95 cents and then at 440.00 cents. Wyckoff's Market Rating: 7.0.