Gold At 6-Mo. Low, But Metal Is Now Oversold
(Kitco News) - Gold prices are down and hit another six-month low in early-afternoon U.S. trading Thursday. However, prices have moved up from their daily lows. An appreciating U.S. dollar on the foreign exchange market continues to squelch buying interest in the precious metals. However, the gold market is now short-term oversold and due for a least a decent corrective upside bounce very soon, and perhaps as early as Friday. August Comex gold futures were last down $3.60 an ounce at $1,270.80. July Comex silver was last up $0.011 at $16.32 an ounce.
The specter of a global trade war continues to dent trader and investor confidence and is pressuring world stock and commodity markets. Gold and silver continue to act like the raw commodities they are, instead of safe-haven stores of value.
Worries about rising interest rates are also a bearish element for gold and silver markets. As safe-haven assets, the metals pay no dividends, whereas interest-bearing securities do.
The key “outside markets” today find the U.S. dollar index down a bit at midday after hitting another 11-month high overnight. The strong greenback is a major bearish weight on the raw commodity sector, along with the world trade worries.
Meantime, Nymex crude oil prices were near steady and trading around $65.70 a barrel. Oil traders are looking ahead to the OPEC meeting that begins Friday in Vienna, Austria. Saudi Arabia and Russia are expected to announce they will increase oil production. Falling oil prices are also negative for the raw commodity sector, given that oil is arguably the sector leader.
Technically, the gold bears have the firm overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,251.90. First resistance is seen at $1,278.60 and then at this week’s high of $1,286.80. First support is seen at today’s low of $1,262.40 and then at $1,251.90. Wyckoff's Market Rating: 3.0
The silver bears have the firm overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $17.35 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at $16.50 and then at this week’s high of $16.635. Next support is seen at today’s low of $16.19 and then at $16.07. Wyckoff's Market Rating: 3.0.
July N.Y. copper closed down 165 points at 302.40 cents today. Prices closed nearer the session low. The copper bears have the overall near-term technical advantage amid the steep sell off recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 320.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 295.85 cents. First resistance is seen at today’s high of 305.35 cents and then at 307.50 cents. First support is seen at 301.00 cents and then at 300.00 cents. Wyckoff's Market Rating: 3.0.By Jim Wyckoff
For Kitco News
Jim Wyckoff has spent over 25 years involved with the stock, financial and commodity markets. He was a financial journalist with the FWN newswire service for many years, including stints as a reporter on the rough-and-tumble commodity futures trading floors in Chicago and New York. As a journalist, he has covered every futures market traded in the U.S., at one time or another.
Jim is the proprietor of the "Jim Wyckoff on the Markets" analytical, educational and trading advisory service. Jim also worked as a technical analyst for Dow Jones Newswires and as the senior market analyst with TraderPlanet.com. Jim is also a consultant with the highly respected "Pro Farmer" agricultural advisory service. Jim was also the head equities analyst at CapitalistEdge.com. He received his degree from Iowa State University in Ames, Iowa, where he studied journalism and economics.
Follow Jim daily on Kitco.com as he provides both AM and PM roundups and a daily Technical Special. 1 877 963-NEWS jwyckoff at kitco.com
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