Solid price pressure on gold, silver amid scant risk aversion
(Kitco News) - Gold and silver prices are sharply down and near their session lows in early morning U.S. trading Monday. The safe-haven bulls are fading amid a global trading environment that sees robust risk appetite amid no major geopolitical or economic speed bumps on the investment road. Some chart-based selling pressure is also seen as the near-term technical posture for both metals has deteriorated just recently, especially for gold. August gold futures were last down $27.00 at $1,851.40 and July Comex silver was last down $0.471 at $27.68 an ounce.
Global stock markets were mixed but mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins and at or near record highs. Chinese and Australian markets were closed for holidays.
The just-completed Group of Seven industrial countries meeting in the U.K. did not produce any news that significantly moved markets. A main focus of the meeting was how the group could engage China in a way that is non-confrontational.
The U.S. data point of the week is the Federal Reserve’s FOMC meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. While no major changes are expected for U.S. monetary policy, focus will be on the Fed’s tenor on inflation prospects and when the central bank will start to taper its very easy money policies. Fed officials recently have hinted they will begin discussing a timetable for reducing its bond-buying program (quantitative easing) sooner rather than later.
The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are up and trading around $71.50 a barrel after hitting a 2.5-year high of $71.70 overnight. The key U.S. Treasury 10-year note yield is fetching 1.464%.
There is no major U.S. economic data due for release Monday.
Technically, August gold futures bulls have the overall near-term technical advantage but are fading fast. A nine-week-old price uptrend on the daily bar chart has been negated. 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 $1,810.70. First resistance is seen at $1,865.00 and then at today’s high of $1,879.70. First support is seen at $1,850.00 and then at $1,835.00. Wyckoff's Market Rating: 6.5
The silver bulls have the overall near-term technical advantage but trading has turned sideways and choppy recently. 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 $27.00. First resistance is seen at $28.00 and then at the overnight high of $28.125. Next support is seen at last week’s low of $27.475 and then at the June low of $27.09. Wyckoff's Market Rating: 6.5.