Gold and silver prices see routine downside corrections Thursday

New York (July 30)  Gold prices are moderately down in midday U.S. trading Thursday, with silver prices sharply lower. These are normal corrective price pullbacks in still-strong uptrends on the charts. Once again, look for bulls to soon step in to buy the dips and do some bargain hunting. August gold futures were last down $12.20 an ounce at $1,941.20. September Comex silver prices were last down $0.926 at $23.39 an ounce.

The marketplace Thursday morning got its first look at second-quarter U.S. gross domestic product and it was not at all pretty, coming in at down a stunning 32.9% from the first quarter. Analysts had forecast 1Q GDP to be down just shy of 35% from the first quarter. Today’s number is the worst quarterly GDP reading since it began being recorded in 1947, and beats the previous quarterly downturn by three-fold. Earlier today Germany released its 2Q GDP and it came in at -10.1% from 1Q and down 11.7%, year-on-year. Those numbers were the worst on record, dating back 50 years.

Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are mixed to lower at midday. Market participants were in a gloomier mood Thursday. The Covid-19 pandemic death toll in the U.S. has climbed above 150,000 and the anticipated “second wave” of infections appears to be a foregone conclusion at this point.

U.S. traders and investors also focused on some somber comments made by Fed Chairman Jerome Powell on Wednesday afternoon, at his press conference following the FOMC meeting that saw no change in U.S. monetary policy. “It looks like the data are pointing to a slowing pace of the recovery,” said Powell, citing evidence of a pullback by consumers and a slowdown in the rehiring of furloughed workers, particularly by small businesses. Today’s 12,000 rise in U.S. jobless claims from last week’s number corroborates a weakening of the economic recovery process.

U.S. stock indexes had been supported recently by corporate earnings reports that have generally beat market expectations.

Meantime, the U.S. Congress is nowhere close to agreeing on a new stimulus package for Americans, heading into their August recess.

The important outside markets today see Nymex crude oil prices lower, hitting a four-week low and trading around $40.25 a barrel. The U.S. dollar index is lower today after hitting a nearly two-year low on Wednesday. The yield on the benchmark U.S. Treasury 10-year note is currently trading around the 0.55% level.

Technically, August gold futures bulls still have the strong overall near-term technical advantage, to suggest still more upside in the near term. Prices are in an accelerating seven-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price objective is to produce a close above technical resistance at $2,000.00. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,850.00. First resistance is seen at today’s high of $1,965.10 and then at the record high of $1974.90. First support is seen at today’s low of $1,930.00 and then at $1,900.00.


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