(Kitco News) - Gold and silver prices are lower in midday U.S. trading Tuesday, pressured in part by profit-taking from recent gains and by a solid rally in the U.S. dollar index. August gold was last down $26.00 at $3,333.50. September silver prices were last down $0.752 at $37.99.
A Bank of America fund managers survey saw the fund managers saying being short the U.S. dollar is the most crowded trade at present. Veteran traders know that when too many traders are on one side of the boat, that trade has probably already run its course. It is my bias that the U.S. dollar index has bottomed out, and that has significant implications for many markets.
Today’s U.S. consumer price index report was not deemed problematic for inflation. The U.S. data point of the week saw the CPI for June come in at up 2.7%, year-on-year, which was in line with market expectations and compares to up 2.4% in the May CPI report. The core CPI (excluding food and energy) was up 2.9% annually, also in line with expectations. Markets showed no significant immediate reactions to the data, but the USDX did rally and bond yields upticked on notions that inflation is still sticky enough to keep the Fed standing pat and not cutting interest rates soon.
U.S. stock indexes are mixed at midday. Nymex crude oil futures prices are weaker and trading around $66.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.477%.
Technically, August gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $3,250.50. First resistance is seen at $3,350.00 and then at this week’s high of $3,389.30. First support is seen at $3,320.00 and then at $3,300.00. Wyckoff's Market Rating: 7.0
September silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $40.00. The next downside price objective for the bears is closing prices below solid support at $36.00. First resistance is seen at today’s high of $38.74 and then at $39.00. Next support is seen at $37.73 and then at $37.50. Wyckoff's Market Rating: 8.0
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