Gold pops to 4-week high on friendlier charts, weaker USDX

Gold prices are moderately up and hit a four-week high in midday U.S. trading Tuesday. The yellow metal was boosted by technical buying, a weaker U.S. dollar index and even by some light safe-haven demand. October gold futures were last up $9.20 at $1,803.60. September Comex silver futures were last down $0.119 at $20.495 an ounce.

Traders are awaiting two key U.S. inflation reports that are on deck. Wednesday comes the consumer price index report for July, which is seen coming in up 8.7%, year-on-year, after a rise of 9.1% in the June report. Thursday comes the producer price index report for July, seen up 0.2% from June and compares to the June report’s rise of 1.1% from May.

Global stock markets were steady to mixed overnight. U.S. stock indexes are weaker at midday. Corporate earnings reports are in focus for stock traders this week. China-Taiwan tensions remain high as China is conducting military exercises near Taiwan, with Taiwan saying it will conduct its own military maneuvers. This geopolitical matter is likely prompting some safe-haven demand for gold, especially from Asians.

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The key outside markets today see Nymex crude oil prices weaker and trading around $90.25 a barrel. The U.S. dollar index is modestly lower in midday U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 2.783%.

Technically, October gold futures prices hit a four-week high today. The gold futures bears still have the slight overall near-term technical advantage. However, a fledgling price uptrend is in place on the daily bar chart to suggest more upside in the near term. Bulls’ next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at today’s high of $1,806.00 and then at 1,825.00. First support is seen at today’s low of $1,788.50 and then at this week’s low of $1,776.20. Wyckoff's Market Rating: 4.5.

September silver futures bears have the overall near-term technical advantage. However, prices are in a fledgling uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00. The next downside price objective for the bears is closing prices below solid support at $19.00. First resistance is seen at this week’s high of $20.745 and then at $21.00. Next support is seen at $20.25 and then at $20.00. Wyckoff's Market Rating: 4.0.

September N.Y. copper closed up 65 points at 359.30 cents today. Prices closed near mid-range and hit another five-week high today. The copper bears have the overall near-term technical advantage. However, prices are trending up on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 330.00 cents. First resistance is seen at today’s high of 363.05 cents and then at 370.00 cents. First support is seen at this week’s low of 353.15 cents and then at 350.00 cents. Wyckoff's Market Rating: 4.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips