Gold, silver down as USDX, equities rebound, U.S. Treasury yields up-tick

NEW YORK (August 6) Gold prices are solidly lower and silver prices modestly weaker in midday trading Tuesday. The general marketplace has calmed down following Monday’s high anxiety that saw major sell-offs in global stock markets. A bounce in the U.S. dollar index, a solid rebound in the U.S. stock indexes and a mild up-tick in U.S. Treasury yields are all bearish daily “outside market” elements working against the precious metals markets today. December gold was last down $20.30 at $2,423.70. September silver was down $0.087 at $27.13.

Asian and European stock indexes were mostly higher overnight. Japan’s Nikkei closed 10% higher Tuesday, recovering much of Monday’s 12.4% loss. U.S. stock indexes are solidly up after hitting three-month lows Monday. There are technical clues the stock market bears ran out of gas after a steep three-week downdraft. Trading action the rest of this week will be extra important in determining if the big sell off in stocks has ended.

Worries about a broader Middle East war are still on the front burner of the marketplace. Israel is bracing for a major attack from Iran and its proxies after Israel last week assassinated key military officials from Hamas and Hezbollah. Reports said truckloads of surface-to-surface missiles are headed to southern Syria. Weapons convoys were seen moving from Iran through Iraq to Syria. Iran is also moving missile launchers, the reports said.

Nymex crude oil prices are firmer after hitting a six-month low Monday and are trading around $73.50 a barrel. The benchmark 10-year U.S. Treasury note is presently fetching 3.87%.

Technically, December gold bulls still have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. First resistance is seen at $2,450.00 and then at the overnight high of 2,459.50. First support is seen at this week’s low of $2,403.80 and then at $2,398.20. Wyckoff's Market Rating: 6.5.

September silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $39.355. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at the overnight high of $27.67 and then at $28.00. Next support is seen at this week’s low of $26.595 and then at $26.00.

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