Slight price gains for gold, silver in summertime trading

Article by Jim Wyckoff - Shared from Kitco News

Gold and silver prices are holding mild gains in early morning U.S. trading Wednesday. A weaker U.S. dollar index and higher crude oil prices at mid-week are working in favor of the precious metals bulls. Bullish technical chart postures remain in place for both metals. Still, the buyers of the safe-haven metals are a bit tentative amid little risk aversion in a quieter global marketplace. August gold futures were last up $1.80 at $1,894.90 and July Comex silver was last up $0.099 at $27.83 an ounce.

Global stock markets were mixed and mostly flat in overnight trading. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The global marketplace is calm at present, amid no major geopolitical flareups in play.

In overnight news, China reported a big jump in price inflation Wednesday, with its producer price index rising 9% in May, year-on-year, after a surge of 6.8% in April. China’s consumer price index was tamer, with a May reading of up 1.3%, year-on-year. Rising inflationary pressures are a bullish element for the metals markets.

Traders are awaiting the U.S. economic data point of the week, which will be Thursday morning’s consumer price index report for May, which is expected to come in at up 0.5% from April and up 4.7%, year-on-year. Traders and investors continue their buzz regarding the prospects for inflation to heat up to uncomfortable levels in the coming months. Rising raw commodity prices the past few months are an ominous sign that inflation could become problematic.

Meantime, the European Central Bank holds its regular monetary policy meeting on Thursday.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly up and trading around $70.25 a barrel after hitting a 2.5-year high of $70.62 overnight. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.514%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, and the weekly DOE liquid energy stocks report.

Technically, August gold futures bulls have the firm overall near-term technical advantage amid a nine-week-old price uptrend in place on the daily bar chart.

Bulls’ next upside price objective is to produce a close above solid resistance at the June high of $1,919.20.

Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00.

First resistance is seen at $1,900.00 and then at this week’s high of $1,906.90.

First support is seen at this week’s low of $1,883.70 and then at $1,866.70. Wyckoff's Market Rating: 7.0

The silver bulls have the overall near-term technical advantage but a two-month-old price uptrend on the daily bar chart has stalled out.

Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at the May high of $28.90 an ounce.

The next downside price objective for the bears is closing prices below solid support at $26.00.

First resistance is seen at this week’s high of $28.12 and then at $28.37.

Next support is seen at this week’s low of $27.595 and then at $27.31. Wyckoff's Market Rating: 6.5.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Article by Jim Wyckoff - Shared from Kitco News