Gold Pushes To 3-Week High On Weakening Greenback, Bullish Technicals
New York (Aug 2) Gold prices ended the U.S. day session solidly higher and hit a three-week high Tuesday. Gold and the other precious metals prices have been supported recently by a slumping U.S. dollar index. The near-term technical postures for the precious metals markets are also fully bullish, which is inviting fresh chart-based buying interest. December Comex gold was last up $12.90 an ounce at $1,372.50. September Comex silver was last up $0.19 at $20.69 an ounce.
The key “outside markets” on Tuesday saw the U.S. dollar index solidly lower and hit a five-week low. The greenback is in a big slump after hitting a four-month high just last week. Meantime, Nymex crude oil prices were lower and hit a four-month low. Oil prices are trending lower, with Nymex futures trading below $40.00 per barrel.
Global stock markets were mostly weaker Tuesday, as falling crude oil prices are a negative for equities, in general, and suggest deflationary price pressures are still problematic in world economies. The weakening world oil prices are also a negative for the raw commodity sector, including the precious metals.
European stocks were down partly on worries about the health of banks in Italy. Asian stocks were somewhat pressured after the Japanese government unveiled its latest economic stimulus program. The $274 billion package was deemed to be a bit less than Asian market watchers expected.
Australia’s central bank cut its interest rate to a record low Tuesday, as expected by the marketplace. There are also central bank meetings in the U.K. and Thailand this week, which will be closely watched by the marketplace.
The Euro zone did get some upbeat economic data Tuesday when the region’s producer price index for June rose 0.7% month-on-month, which was above expectations. The index was down 3.1%, year-on-year, which was also above expectation—although still a worrisome figure on the price deflation front.
Technically, December gold futures prices closed nearer the session high today. The gold bulls have the solid overall near-term technical advantage and have upside momentum. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,384.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,350.00. First resistance is seen at today’s high of $1,374.20 and then at $1,380.00. First support is seen at $1,360.00 and then at this week’s low of $1,353.20. Wyckoff’s Market Rating: 7.5
September silver futures prices hit a four-week high and closed nearer the session high today. The silver market bulls have the solid overall near-term technical advantage and have upside momentum. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.225 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.50.
Source: KitcoNews
