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Gold price powers to 2-week high as USDX wilts, crude oil gains

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(Kitco News) - Gold and silver prices are sharply higher and near daily highs in midday U.S. dealings Thursday. Bullish outside market forces on this day are fueling gains in the metals, as the U.S. dollar index is solidly lower and crude oil prices are higher. The precious metals bulls are also deeming Wednesday afternoon’s FOMC results as market-friendly. August gold futures were last up $32.20 at $1,831.90 and September Comex silver was last up $0.943 at $25.82 an ounce.

Traders and investors on Thursday were still digesting Wednesday afternoon’s conclusion of the meeting of the Federal Reserve’s Open Market Committee (FOMC), including a press conference from Fed Chair Jay Powell. After initially thinking the Fed was leaning less dovish, in the immediate aftermath of the FOMC statement, Powell’s press conference seemed to assuage the marketplace into thinking that while the Fed may start to taper its bond-buying program (quantitative easing) as soon as this year, due to a strengthening U.S. economy, the central bank will not be in a hurry to back off from its overall accommodative monetary policies. That rallied gold and silver prices after some initial hesitation in the immediate aftermath of the FOMC statement, pressured the U.S. dollar index and kept U.S. Treasury bond yields near steady by the end of the day Wednesday.

The latest reading on U.S. gross domestic product was a miss to the downside at 6.5% annual growth in the second quarter. The second-quarter GDP was seen up 8.4%. The closely watched PCE price index of the GDP data came in up a hotter-than-expected 6.4% rise. The PCE was seen up 3.7%, year-on-year. The PCE number falls into the camp of those looking for stronger price inflation in the coming months, or longer. The GDP data also leaned friendly to the metals markets.

The World Gold Council said global demand for gold has yet to recover from the pandemic. The WGC said gold demand during the first half of 2021 was the lowest since 2008. The April-to-June period saw global gold demand at 955.1 metric tons (MT), a reduction from 960.5 MT over the same period in 2020. The second quarter of 2019 saw demand of 1,132.1 MT. However, central banks bought more gold between April and June 2021 than any quarter for two years. ETFs also added considerable amounts of gold to their stockpiles in the second quarter of this year, said the WGC.

The yield on the U.S. Treasury 10-year note is presently fetching 1.27%.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold futures bulls have regained the overall near-term technical advantage. 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 $1,800.00. First resistance is seen at the July high of $1,835.00 and then at $1,850.00. First support is seen at $1,815.00 and then at $1,800.00. Wyckoff's Market Rating: 6.0.

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears still have the overall near-term technical advantage. Prices are still in a 2.5-month-old downtrend on the daily bar chart. However, the silver bulls have momentum on their side now. Silver bulls' next upside price objective is closing September futures prices above solid technical resistance at the July high of $26.91 an ounce. The next downside price objective for the bears is closing prices below solid support at this week’s low of $24.515. First resistance is seen at $26.00 and then at $26.25. Next support is seen at $25.50 and then at $25.25. Wyckoff's Market Rating: 3.5.
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.