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Gold sees corrective price bounce after recent selling pressure

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(Kitco News) - Gold prices are moderately up in early U.S. trading Monday on a corrective rebound after dropping sharply last week. Silver prices are modestly lower to start the trading week. August gold futures were last up $8.00 at $1,776.40 and July Comex silver was last down $0.039 at $25.93 an ounce.

Global stock markets were mixed overnight, with Asian shares mostly lower and European shares mostly higher. The U.S. stock indexes are pointed toward higher openings when the New York day session begins, after suffering a rough week last week.

The marketplace continues to buzz about inflation prospects after last week’s hawkish monetary policy tone from the Federal Reserve. However, with many economic indicators pointing to the stronger potential for higher inflation creating problems, one major indicator does not: U.S. Treasury yields. The yield on the benchmark U.S. 10-year Treasury note is fetching 1.43% Monday morning. That’s lower than the yield on the 10-year note that was seen prior to last Wednesday’s FOMC meeting results. U.S. T-Note yields have fallen for five straight weeks. The marketplace will closely scrutinize Federal Reserve Chairman Jerome Powell’s remarks to a House committee Tuesday afternoon.

In other news, Bitcoin prices fell over 10% after China authorities said banks and payment institutions cannot provide payment services for crypto-currency related transactions. Also, the city of Ya’an moved to curtail digital mining in the hydropower-rich region of China.

The key outside markets today see the U.S. dollar index weaker on a corrective pullback after solid gains posted last week. Nymex crude oil futures are a bit firmer and trading around 71.75 a barrel.

U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures bears have the overall near-term technical advantage. Prices have dropped well below the key 200-day moving average and are trending lower on the daily chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at the overnight high of $1,785.90 and then at $1,800.00. First support is seen at last week’s low of $1,761.20 and then at $1,750.00. Wyckoff's Market Rating: 4.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $27.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at Friday’s high of $26.555 and then at $27.00. Next support is seen at the overnight low of $25.58 and then at $25.25. Wyckoff's Market Rating: 4.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.