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Gold, silver see upside price corrections after recent steep slide

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(Kitco News) - Gold and silver prices are moderately higher in early U.S. trading Tuesday, on normal upside price corrections after the sharp losses suffered last Friday and on Monday. The precious metals bulls appear to have stabilized their markets—at least for now. October gold futures were last up $7.40 at $1,731.80 and September Comex silver was last up $0.166 at $23.435 an ounce.

(By the way, I was on vacation last week—leading a Jeeping expedition across the U.S. Continental Divide high in the Rocky Mountains. It was a great adventure. I know I have a good job at Kitco when I really did not mind coming back to work this week to serve you, my valued Kitco reader!—Jim)

Global stock markets were mixed but mostly firmer overnight. The U.S. stock indexes are pointed mixed to weaker openings when the New York day session begins. Markets are quieter Tuesday morning, amid the summertime doldrums, when much of Europe is on holiday and many North American traders and investors are taking family vacations. Traders will be closely parsing speeches by a couple of Federal Reserve officials today, Loretta Mester and Charles Evans, looking for clues on the timing and direction of U.S. monetary policy—especially after last Friday's much-stronger-than-expected U.S. jobs report. Separately, reports this week say the Biden Administration generally supports appointing Fed Chairman Jerome Powell to a second term.

Germany's close watched ZEW consumer sentiment survey showed a drop for the third straight month, and to the lowest level since last November, as a rise in Covid infection rates raises concerns over a possible tightening of pandemic curbs. The ZEW economic expectations index fell to 40.4 in August from 63.3 in July, with the institute's president warning of "increasing risks" to the German economy. The index of current conditions improved to 29.3 in August from 21.9 in July.

The key outside markets today see the U.S. dollar index firmer and hitting a three-week high overnight. Nymex crude oil futures prices are higher on a corrective bounce from recent strong selling pressure and trading around $67.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.316%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales reports, the NFIB small business index, and preliminary productivity and costs.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bears have the overall near-term technical advantage amid the recent steep downdraft in prices. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's spike low of $1,676.40. First resistance is seen at $1,750.00 and then at this week's high of $1,763.00. First support is seen at $1,725.00 and then at $1,700.00. Wyckoff's Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the solid overall near-term technical advantage. Prices are in an 11-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing September futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at this week's low of $22.295. First resistance is seen at the overnight high of $23.675 and then at $24.00. Next support is seen at $23.00 and then at $22.75. Wyckoff's Market Rating: 2.5.

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.