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Gold sees modest price gains, bulls still have momentum

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(Kitco News) - Gold and silver prices are trading mildly up in early U.S. trading Tuesday. Both metals have seen their near-term chart postures improved recently and that’s inviting the technical-based speculators to the long side of the futures markets. It’s been and likely will continue to be a quieter trading week on this unofficial last week of summer for Americans, ahead of the three-day Labor Day holiday weekend. October gold futures were last up $3.20 at $1,813.00. September Comex silver was last up $0.12 at $24.08 an ounce.

Global stock markets were mostly firmer overnight. The U.S. stock indexes are pointed to slightly higher openings when the New York day session begins, with S&P 500 and Nasdaq futures poking to record highs overnight.

In overnight news, the U.S. said it has fully pulled its troops and planes out of Afghanistan, ending a 20-year war with the Taliban, who declared victory over the world’s mightiest military.

The Euro zone consumer price index for August came in at up 3.0%, year-on-year, which was a bit hotter than expectations of up 2.7%. July’s CPI reading was up 2.2%.

China’s economy was jolted in August by the resurgence of the Covid virus. The world’s second-largest economy saw its unofficial non-manufacturing purchasing managers’ index (PMI) drop to 47.5 in August, compared to 53.3 in July. A reading below 50.0 suggests contraction in the sector. It was the lowest reading since February of 2020 for this segment of the PMI survey. Meantime, China’s manufacturing PMI in August came in at 50.1 from 50.4 in July.

Broker SP Angel today reported in an email dispatch that sales of gold jewelry in China have improved significantly over the past year among younger Chinese consumers--doubling demand in the first half of 2021. China’s overall economic recovery from the pandemic combined with the increasing popularity of e-commerce websites have helped the a boom in gold demand.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil futures prices are lower and trading around $68.65 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.287%.  

U.S. economic data due for release Tuesday includes weekly chain store sales and the Johnson Redbook retail sales reports, the monthly house price index, S&P-Case-Shiller home index, the Chicago ISM business survey, and the consumer confidence index.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at Monday’s high of $1,823.60 and then at $1,836.20. First support is seen at Monday’s low of $1,807.80 and then at $1,800.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage but are making headway. A three-month-old downtrend on the daily bar chart has been at least temporarily negated. 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 $23.00. First resistance is seen at Monday’s high of $24.22 and then at $24.515. Next support is seen at Monday’s low of $23.905 and then at $23.75. 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.