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Gold, silver get a lift as Fed's Powell leans easy on money policy

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(Kitco News) - Gold and silver prices are higher in midday U.S. trading Wednesday, with gold notching a three-week high. The market place focus at mid-week is on Federal Reserve Chairman Jerome Powell’s testimony to a House of Representatives committee today on U.S. monetary policy and the economy. Powell leaned a bit dovish on U.S. monetary policy by saying the Fed is still a ways off on tapering its bond-buying program (quantitative easing) and reiterated that rising inflation pressures are likely only transitory. His prepared remarks pushed the gold and silver markets to their daily highs in morning action, and also pushed the U.S. dollar index lower. August gold futures were last up $12.70 at $1,822.70 and September Comex silver was last up $0.09 at $26.23 an ounce.

Speaking of inflation, the U.S. producer price index for June released this morning came out at up 1.0% from May, beating the forecast of up 0.6%. The hotter number in today’s PPI report was not surprising to many and had little impact on market prices. On Tuesday the U.S. consumer price index was reported at up 5.4% in June, year-on-year, which is the hottest in 13 years. There are many who think the Federal Reserve is presently behind the curve on its inflation expectations.

Global stock markets were mostly weaker overnight. The U.S. stock indexes are a bit firmer in midday trading. The global markets are starting to pay more attention to the new Covid-19 variant that is spreading in some parts of the world, including the U.S., and is beginning to threaten some regional economies.

The key outside markets today see the U.S. dollar index lower on the dovish Powell text, while Nymex crude oil prices are lower and trading around $73.65 a barrel. OPEC and the United Arab Emirates have reportedly agreed on a solution to their dispute and the oil market is apparently reading it as neutral or a bit bearish. The 10-year U.S. Treasury note yield is presently fetching 1.36%.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the overall near-term technical advantage and gained some more power today. A fledgling price uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $1,791.00. First resistance is seen at today’s high of $1,831.10 and then at $1,840.00. First support is seen at today’s low of $1,804.90 and then at $1,800.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today’s high of $26.575 and then at the July high of $26.91. Next support is seen at $26.00 and then at last week’s low of $25.82. Wyckoff's Market Rating: 5.0.

September N.Y. copper closed down 435 points at 426.30 cents today. Prices closed near the session low today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at this week’s high of 436.40 cents and then at the July high of 440.25 cents. First support is seen at the July low of 422.65 cents and then at 420.00 cents. Wyckoff's Market Rating: 5.5.

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.