Price weakness in gold, silver as USDX surges to 20-year high
(Kitco News) - Gold and silver prices are modestly lower in early U.S. trading Tuesday. The metals are feeling the pressure of a stronger U.S. dollar index that notched a 20-year high overnight. The near-term technicals for gold and silver are also fully bearish, which is inviting the chart-based speculators to play the short sides of the futures markets. August gold futures were last down $4.60 at $1,797.00. September Comex silver futures were last down $0.027 at $19.65 an ounce.
Global stock markets were mixed overnight, with Asian shares mostly up and European shares mostly down. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Recession and inflation worries are still tamping down trader and investor risk appetite.
In overnight news, the U.S. as soon as this week may start to roll back some U.S. tariffs on Chinese imports, which were imposed by the Trump administration. The move would be an attempt by the Biden administration to alleviate inflation/recession concerns.
The U.S. data point of the week is Friday’s employment situation report for June. The key non-farm payrolls number is expected to come in up 250,000 compared to the 390,000 rise in the May report.
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The key outside markets today see Nymex crude oil prices weaker and trading around $108.30 a barrel. The U.S. dollar index is sharply higher and hit a 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.891%. Recent falling U.S. Treasury yields are one early clue that U.S. inflation may have peaked.
U.S. economic data due for release Tuesday includes manufacturers’ shipments and inventories.
Technically, the August gold futures bears have the solid overall near-term technical advantage as prices hit a five-month low last Friday. 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 $1,750.00. First resistance is seen at the overnight high of $1,815.20 and then at $1,826.80. First support is seen at $1,792.00 and then at last week’s low of $1,783.40. Wyckoff's Market Rating: 2.5
September silver futures bears have the solid overall near-term technical advantage as prices are near a two-year low. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at $20.00 and then at Friday’s high of $20.29. Next support is seen at last week’s low of $19.295 and then at $19.00. Wyckoff's Market Rating: 1.0.