Gold a bit firmer amid conflicting daily fundamentals
(Kitco News) - Gold prices are slightly higher in midday U.S. trading Wednesday, supported by a solid drop in U.S. Treasury yields and in the U.S. dollar index. However, gains are limited by a solid decline in crude oil prices. August gold futures were last up $1.50 at $1,840.40. July Comex silver futures were last down $0.303 at $21.465 an ounce.
Gold prices only briefly gyrated following the release of the prepared text of Federal Reserve Chairman Jerome Powell’s remarks to a U.S. Senate panel. Prices quickly returned to near the levels seen just before the prepared text hit the newswires. Powell continued to sound a hawkish tone on U.S. monetary policy, including saying the Fed will have to keep raising interest rates to tamp down problematic price inflation. The marketplace deemed the Fed chief’s comments as not surprising.
Global stock markets were mostly down overnight. U.S. stock indexes are slightly up at midday. It’s a mostly risk-off trading week so far, amid ongoing inflation, U.S. recession and geopolitical worries.
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For the metals markets lately, it appears traders are more focused on the bearish aspect of less demand coming from a possible U.S. and/or global economic recession, and less on the bullish aspect of inflation being historically bullish for hard assets like the metals.
Inflation continues to run hot in Europe. The U.K. today reported its May consumer inflation was up 9.1%, which is a 40-year high.
The key outside markets today see Nymex crude oil solidly lower and trading around $106.25 a barrel. The U.S. dollar index is lower in midday trading. The yield on the 10-year U.S. Treasury note is fetching 3.152%.
Technically, August gold futures bears have the overall near-term technical advantage. However, the recent sideways and choppy trading action at lower price levels is suggesting a market bottom is in place. Bulls' next upside price objective is to produce a close above solid resistance at the June high of $1,882.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,850.30 and then at last week’s high of $1,861.50. First support is seen at today’s low of $1,824.50 and then at $1,815.00. Wyckoff's Market Rating: 3.5.
July silver futures bears have the overall near-term technical advantage. However, recent sideways and choppy price action begins to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $22.565 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at today’s high of $21.675 and then at $22.00. Next support is seen at today’s low of $21.205 and then at $20.00. Wyckoff's Market Rating: 3.0.
July N.Y. copper closed down 865 points at 395.25 cents today. Prices closed near mid-range and hit a 16-month low today. The copper bears have the solid overall near-term technical advantage. A three-week-old price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 425.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 375.00 cents. First resistance is seen at 400.00 cents and then at this week’s high of 408.20 cents. First support is seen at today’s low of 388.05 cents and then at 385.00 cents. Wyckoff's Market Rating: 1.0.