Gold, silver down as chart-based bears pressing their case

Gold and silver prices are lower at midday today, in a choppy, two-sided trading session. The significantly bearish near-term technical postures for both metals are inviting the speculators to play the short sides of the futures markets at present. Gold hit a six-week low and silver a two-year low today. August gold futures were last down $6.80 at $1,810.60. Gold prices are close to key chart support levels ($1,800.00 and $1,792.00) that if breached would likely set off heavy sell stop orders in the futures market. July Comex silver futures were last down $0.363 at $20.29 an ounce.

The U.S. data point of the day was the personal income and outlays report for May, including the personal consumption expenditures price index component of the report that is said to be the Federal Reserve’s favorite inflation gauge. The May CPE price index came in up 6.3%, year-on-year, with the core rate up 4.7% in the same period. In the April report, the PCE price index was also reported up 6.3%, year-on-year. Metals market bulls were briefly assuaged by the stable readings in the report, as many reckoned the numbers could have been worse, possibly prompting the Federal Reserve to be even more aggressive in its monetary policy tightening. Raw commodity traders, including metals traders, have taken a tack recently of being more worried about less consumer and commercial demand for commodities amid an economic recession—as opposed to the notions of higher inflation being supportive for raw commodity prices.

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Global stock markets were mostly lower overnight. U.S. stock indexes are lower at midday, on this last trading day of the month and of the first half of 2022. Reports said the S&P 500 is set to close out its worst half-year since the 1970s. Trader and investor risk appetite has receded late this week, following downbeat consumer confidence and GDP readings out of the U.S. this week. Fed Chairman Powell and ECB President Lagarde on Wednesday repeated warnings that their central banks will keep raising interest rates even if their economies slowed down. Recently, much of the marketplace has deemed economic recessions potential as superseding inflation worries, when placing their trades.

The key outside markets today see Nymex crude oil prices lower and trading around $107.75 a barrel. The U.S. dollar index is weaker in midday U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 2.9%. Yields have declined this week amid the increased concerns regarding a U.S. economic recession.

Technically, August gold prices hit a six-week low early on today. Bears have the firm overall near-term technical advantage and have gained power this week. Prices are starting to trend down on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the June high of $1,882.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,792.00. First resistance is seen at today’s high of $1,826.80 and then at Wednesday’s high of $1,834.90. First support is seen at $1,800.00 and then at $1,792.00. Wyckoff's Market Rating: 2.5.

July silver futures prices hit a two-year low today. The silver bears have the solid overall near-term technical advantage and gained more power today. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at today’s high of $20.705 and then at $21.00. Next support is seen at today’s low of $20.16 and then at $20.00. Wyckoff's Market Rating: 1.0.

July N.Y. copper closed down 550 points at 372.40 cents today. Prices closed near mid-range today. The copper bears have the solid overall near-term technical advantage. A four-week-old price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at this week’s high of 384.30 cents and then at 390.00 cents. First support is seen at today’s low of 368.80 cents and then at the June low of 364.00 cents. Wyckoff's Market Rating: 1.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips