(Kitco News) - Gold prices are solidly down in early U.S. trading Thursday, on profit-taking from the shorter-term futures traders and on weak long liquidation (futures traders that recently established long positions and then they quickly went under water). Silver prices modestly lower after hitting a nearly 14-year high this week. August gold was last down $30.60 at $3,366.90. September silver prices were last down $0.143 at $39.35.
Asian and European stocks were mostly higher overnight. U.S. stock indexes are pointed to mixed to firmer openings today in New York.
In overnight news, President Trump late Wednesday suggested he would not go below 15% on tariff rates ahead of the Aug. 1 trade-deal deadline, indicating the floor for the increased tariffs was rising. “We’ll have a straight, simple tariff of anywhere between 15% and 50%,” Trump said Wednesday.
The United Kingdom’s FTSE 100 and Japan’s TOPIX stock indexes hit record highs Thursday, following the announced U.S.-Japan trade deal earlier this week and on optimism the U.S. and European Union can reach a deal before the Aug. 1 U.S.-imposed deadline. Reports have suggested the U.S. and EU are moving toward a 15% tariff agreement.
President Trump will personally visit the Federal Reserve building in Washington today to tour a construction site he has criticized for cost overruns. CNBC reported it has been at least 20 years since a sitting president has visited the Federal Reserve.
The European Central Bank is holding its monetary policy meeting today and will likely leave interest rates unchanged for the first time in more than a year as the ECB awaits more clarity on what U.S. trade tariffs will do the European Union economy. The deposit rate will likely be kept at 2%. However, many analysts expect another 0.25% rate cut from the ECB in September.
A Bloomberg opinion article today says the U.S. economy has not seen tariffs like these in around 80 years. “Given the lack of recent precedent, the Federal Reserve is right to wait on more evidence that consumer prices aren’t spiking before proceeding with interest rate cuts.” There’s also another reason for the Fed to tread carefully: the “strange” behavior of the U.S. dollar, according to the story. Many economists, including Council of Economic Advisors Chair Stephen Miran, expected the greenback to strengthen when President Trump implemented tariffs. Last November, Miran wrote that U.S. dollar was “more likely than not” to appreciate alongside an improving trade balance. “Bafflingly, the dollar actually weakened for reasons that are still hotly debated,” said the Bloomberg opinion piece. The U.S. dollar index has declined by around 7% since just before the “Liberation Day” tariffs unveiled on April 2 and is down around 10% this year.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures are up a bit and trading around $65.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.392%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Chicago Fed national activity index, the U.S. flash and services PMIs, new residential sales, and the Kansas City Fed manufacturing survey.
Technically, August gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the June high of $3,476.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,300.00. First resistance is seen at $3,400.00 and then at $3,425.00. First support is seen at $3,350.00 and then at $3,314.30. Wyckoff's Market Rating: 7.0.
September silver futures bulls have the solid overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. 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 $40.00 and then at $40.50. Next support is seen at this week’s low of $38.365 and then at $38.00. Wyckoff's Market Rating: 8.5.
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