(Kitco News) - Gold prices are modestly lower in early U.S. trading Wednesday, in subdued mid-summer trading. However, there has been a “collapse in volatility” on the daily bar chart, which suggests a significantly bigger price move is coming soon in gold—possibly this week. Given that gold prices are trending lower on the daily chart, odds favor that bigger price move being on the downside. A rebound in the U.S. dollar index at mid-week and lower crude oil prices are bearish daily outside market forces today. August gold futures were last down $4.90 at $1,705.80. September Comex silver futures were last down $0.013 at $18.70 an ounce.
Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session beings. The U.S. stock index bulls are having a good week so far and have restarted near-term price uptrends on the daily charts. Corporate earnings reports are on the front burner of the stock markets this week. Otherwise, its summertime doldrums trading amid a lack of major, fresh news.
In overnight news, Russian president Putin said Russia will honor its natural gas commitments to Europe, but warned sanctions against his country could hinder natural gas movement into Europe.
Traders and investors are looking ahead to Thursday when the European Central Bank holds its regular monetary policy meeting. The ECB is expected to raise interest rates for the first time in 11 years, with many market watchers looking for a 0.5% rate increase. The U.S. Federal Reserve is expected to raise its key interest rate by at least 0.75% at next week’s FOMC meeting.
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The key outside markets today see Nymex crude oil prices weaker and trading around $102.50 a barrel. The U.S. dollar index is higher in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.971%. The 2-year and 10-year Treasury bond yields remain inverted at mid-week, which is one clue of an impending U.S. economic recession.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales and the weekly DOE liquid energy stocks report.
![Live 24 hours gold chart [Kitco Inc.]](/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, the August gold futures bears have the solid overall near-term technical advantage. Prices are trending lower on the daily bar chart. However, the recent “collapse in volatility” on the daily bar chart (whereby at least three price bars in a row are significantly smaller than previous price bars) suggests a bigger price move is coming soon. It’s important to note that markets typically vacillate between periods of higher volatility and lower volatility, and at present the gold market is in a period of low volatility. Bulls’ next upside price objective is to produce a close above solid resistance at $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,650.00. First resistance is seen at this week’s high of $1,722.00 and then at $1,735.00. First support is seen at $1,700.00 and then at the July low of $1,695.00. Wyckoff's Market Rating: 1.5
![Live 24 hours silver chart [ Kitco Inc. ]](/images/live/silver.gif)
September silver futures bears have the solid overall near-term technical advantage as prices hit a two-year low overnight. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $19.00 and then at $19.36. Next support is seen at this week’s low of $18.51 and then at $18.00. Wyckoff's Market Rating: 1.5.
