(Kitco News) - Gold prices are solidly higher and silver prices modestly up in early U.S. trading Thursday. The gold market is seeing some safe-haven demand amid heightened Middle East tensions. A dovish lean by the Federal Reserve this week is also a positive for the precious metals market bulls. December gold was last up $17.10 at $2,490.10. September silver was up $0.187 at $29.125.
Middle East tensions are running even higher late this week following air strikes in Iran and Lebanon that killed senior Hamas and Hezbollah officials. The strikes are widely believed to be Israel’s doing. That has boosted crude oil prices and produced some safe-haven demand for gold and silver.
The marketplace has digested the latest FOMC meeting’s results that left U.S. interest rates unchanged but saw the Federal Reserve and Chairman Powell lean dovish by implying the Fed can lower interest rates in September, providing inflation numbers remain tamer. The marketplace is presently factoring in a 100% chance for a rate cut in September.
Meantime, the Bank England cut its main interest rate by 0.25% today.
China’s Caixin purchasing managers indexes (PMI) showed the manufacturing sector in July fall into contraction for the first time in nine months. The PMI came in lower than expected at 49.8 versus expectations for 51.5 and compares to the June reading of 51.8. New business orders fell for the first time in a year. “The most prominent issues are still insufficient effective domestic demand and weak market optimism,” said the Caixin report.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on a continued solid rebound from last week’s selling pressure.
Traders are awaiting Friday morning’s U.S. monthly jobs report for July from the Labor Department, with the key non-farm payrolls numbers seen coming in at up 185,000 versus the June gain of 206,000.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $78.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.02%.
U.S. economic reports out Thursday include the weekly jobless claims report, the Challenger job-cuts report, preliminary productivity and costs, the U.S. manufacturing PMI, the ISM report on business manufacturing, the global manufacturing PMI, domestic auto industry sales and construction spending.
Technically, December gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. 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 $2,502.80 and then at the April high of $2,516.60. First support is seen at the overnight low of $2,474.00 and then at $2,450.00. Wyckoff's Market Rating: 7.5.
September silver futures bears have the slight overall near-term technical advantage. Prices are still in a downtrend on the daily bar chart, but just barely now. Silver bulls' next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at the July low of $27.45. First resistance is seen at $29.50 and then at $30.00. Next support is seen at Wednesday’s low of $28.39 and then at $28.00. Wyckoff's Market Rating: 4.5.
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