Gold price a bit weaker following downbeat China data

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(Kitco News) - Gold prices are slightly lower in early U.S. trading Wednesday, following some weak economic data out of China that hints of a slowing global economy that could crimp demand for the precious metals. August gold was last down $3.80 at $1,977.80 and July silver was up $0.02 at $23.69.

In overnight news, China's exports fell more than expected in May. Exports declined 7.5% in U.S. dollar terms from a year earlier, missing consensus for a 1.8% drop. Imports fell a less-than- expected 4.5% in May, year-on-year, after being forecast down 8.1%. Reads a Wall Street Journal headline today: "China's trade slowdown points to global woes." The story said China's post-Covid economy is sputtering and global trade is "cooling rapidly" amid major central banks tightening their monetary policies. That has potentially negative demand implications for the raw commodity sector, including the metals.

Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are firmer and trading around $72.50 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.683%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, international trade in goods and services data, consumer credit and the weekly DOE liquid energy stocks report.

Technically, the gold futures bulls have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close in August futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,949.60. First resistance is seen at $1,985.00 and then at $2,000.00. First support is seen at $1,970.00 and then at this week's low of $1,953.80. Wyckoff's Market Rating: 6.5

The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the May low of $22.785. First resistance is seen at this week's high of $23.87 and then at $24.00. Next support is seen at the overnight low of $23.48 and then at this week's low of $23.32. Wyckoff's Market Rating: 5.0.

By

Jim Wyckoff

For Kitco News

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jwyckoff@kitco.com

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