(Kitco News) - Gold prices are trading higher and not far below this week’s all-time record high of $2,487.40, basis August Comex futures. Bullish technical factors, growing marketplace notions the Federal Reserve will cut U.S. interest rates this fall and even some safe-haven demand are fueling gold’s rally. However, silver prices are languishing at present, which is somewhat surprising given gold’s ascent. Still, if gold continues to trend higher silver will likely catch at least some of its tailwind on the upside. August gold was last up $10.10 at $2,470.00. September silver was up $0.253 at $30.63.
There are reports that Chinese consumers are snapping up more gold recently, on safe-haven buying due to worries about China’s economic health, including the health of the Chinese yuan, and also due to the negative-China rhetoric coming from the two U.S. presidential candidates.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
Angus Campbell of Trade Nation said today in an email dispatch: Wednesday’s sharp sell-off in the stock market resulted in the biggest one day fall in the NASDAQ 100 since December 2022. “There’s still plenty of talk about stock rotation. This year’s gains have been led by tech giants and other corporations whose fortunes are linked to the future of generative AI. This has concentrated risk in a relatively narrow sliver of the market and led to a large valuation gap between those leaders and the rest of the market. That gap has reduced somewhat. Smaller domestically focused companies, as found in the Russell 2000, have been bought up, while investors have reduced their exposure to the tech giants. So much so that the Russell has gained 10% in less than a fortnight, while the NASDAQ 100 has now lost 2% over the same period. Time will tell if this turns out to be a trend rather than a fad.”
The European Central Bank left its interest rates unchanged at its meeting today, as expected. This follows the 25 basis-point cut at last month’s meeting. Traders will be closely scrutinizing ECB President Christine Lagarde’s press conference after the meeting.
This week marks the start of China’s Central Committee third plenum, a four-day meeting of the Communist Party leadership to discuss long term economic reforms. The plenum occurs once every five years.
The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are near steady and trading around $82.75 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.167%.
U.S. economic reports out Thursday include the weekly jobless claims report, the Philadelphia Fed business survey, leading economic indicators and Treasury international capital data.
Technically, August gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,400.00. First resistance is seen at the overnight high of $2,478.50 and then at the record high of $2,488.40. First support is seen at today’s low of $2,461.10 and then at $2,450.00. Wyckoff's Market Rating: 9.0.
September silver futures bulls have the overall near-term technical advantage but have faded a bit. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $32.015. The next downside price objective for the bears is closing prices below solid support at the June low of $28.90. First resistance is seen at $31.00 and then at this week’s high of $31.655. Next support is seen at this week’s low of $30.255 and then at $30.00. Wyckoff's Market Rating: 6.5.
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