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Gold price up a bit after weaker U.S. retail sales

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(Kitco News) - Gold and silver prices are trading slightly higher in the immediate aftermath of a weaker-than-expected U.S. retail sales report. The gold market bulls have regained the slight near-term technical advantage and have some momentum on their side. More anxiety in the marketplace early this week is adding support the precious metals markets, on safe-haven demand. October gold futures were last up $2.40 at $1,790.00 and September Comex silver was last up $0.019 at $23.81 an ounce.

The just-released U.S. retail sales report for July came in down 1.1% from June versus an expected decline of 0.3%. The markets showed little reaction to the news, but traders are wondering if the larger-than-expected decline in retail sales in July was due to worries about the resurgence of the Covid virus.

Global stock markets were mostly lower overnight. The U.S. stock indexes are pointed to lower openings when the New York day session begins. Risk-off attitudes are on the rise early this week. The stunningly rapid takeover of Afghanistan by the Taliban has left Americans stranded in the country and its own population running scared. This is the biggest crisis yet for the Biden Administration that was caught completely off-guard by the situation in Afghanistan.

Also, the surging Covid delta virus is starting to impact major economies, including and especially China. The U.S. is also seeing a rapid rise in cases. Traders and investors remember too well the masks and lockdowns that crippled economies just one year ago.

The marketplace is also focusing on the Federal Reserve possibly and even likely tightening its monetary policy as soon as this fall. A town hall speech by Fed Chairman Powell to educators and students today will be very closely parsed. Next week’s annual Jackson Hole Fed symposium is likely to see clarification on the Fed’s monetary policy and the timing of any upcoming actions by the central bank.

In overnight news, the Euro zone second-quarter GDP rose 2.0% from the first quarter and was up 13.6%, year-on-year. Those numbers were in line with market expectations.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are lower and trading around $67.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.23%.

It’s a very busy day for U.S. economic data Tuesday, including the weekly chain store and Johnson Redbook retail sales reports, retail sales, industrial production and capacity utilization, the NAHB housing market index, and manufacturing and trade inventories.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bulls have gained the slight overall near-term technical advantage and have momentum on their side. 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 $1,700.00. First resistance is seen at the overnight high of $1,795.00 and then at $1,800.00. First support is seen at Monday’s low of $1,769.80 and then at $1,760.00. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the solid overall near-term technical advantage. Prices are in a three-month-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 $24.00 and then at $24.38. Next support is seen at Monday’s low of $23.38 and then at $23.00. 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.