Gold, silver see safe-haven and chart-based buying

Gold and silver prices are higher in midday U.S. trading Thursday, with gold sharply up and hitting a four-week high--now within easy striking distance of $1,800.00. Safe-haven demand is featured today as China-Taiwan-U.S. tensions have escalated this week. Short covering in the futures markets and some fresh chart-based buying are also featured today, as the near-term technical postures for both metals have improved this week. October gold futures were last up $29.80 at $1,796.00. September Comex silver futures were last up $0.226 at $20.12 an ounce.

The marketplace was a bit more nervous today after China fired several ballistic missiles around Taiwan, in apparent retaliation for U.S. House Speaker Nancy Pelosi’s visit to Taiwan on Tuesday. China is conducting aggressive military maneuvers around Taiwan.

The Bank of England’s monetary policy meeting conclusion Thursday saw the BOE raise its key interest rate by 0.5%, the largest since 1995. The BOE also warned of a long economic recession for the U.K. The dire economic outlook for the U.K. may also be prompting some safe-haven buying in gold and silver. Some are arguing the BOE is probably more on track on forecasting a longer recession, whereas the Federal Reserve does not like to look that far out—especially if the outlook is not rosy.

Geopolitical uncertainty has quietly supported gold prices, but now the volume has been turned up

The marketplace is looking ahead to Friday morning’s U.S. jobs report for July, which is expected to show non-farm payrolls job growth of around 260,000, compared to a rise of 372,000 in the June report.

The key outside markets today see Nymex crude oil prices lower, at a 4.5-month low and trading around $88.00 a barrel. The U.S. dollar index is lower in midday U.S. trading. The yield on the 10-year U.S. Treasury note is fetching around 2.7%.
 

Technically, October gold futures prices hit a four-week high today. The gold futures bears still have the overall near-term technical advantage. However, a fledgling price uptrend is still in place on the daily bar chart to suggest a market bottom is in place. Bulls have momentum and their 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 $1,720.00. First resistance is seen at $1,800.00 and then at 1,825.00. First support is seen at $1,775.00 and then at today’s low of $1,769.50. Wyckoff's Market Rating: 4.0.

September silver futures bears have the overall near-term technical advantage. However, a price downtrend has been negated to suggest a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.50. 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 $20.51 and then at $20.75. Next support is seen at this week’s low of $17.75 and then at $19.40. Wyckoff's Market Rating: 3.0.

September N.Y. copper closed up 145 points at 348.15 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. However, a steep six-week-old price downtrend on the daily bar chart has been negated and prices are starting to trend up. 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 the July low of 313.15 cents. First resistance is seen at this week’s high of 359.70 cents and then at 365.00 cents. First support is seen at today’s low of 341.60 cents and then at 335.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips