Gold and silver see today some normal profit taking from recent gains

New York (Aug 29)  Gold and silver prices are lower in midday U.S. trading Thursday, on some normal, and arguably healthy, profit taking and backing and filling on the charts following recent good gains. Gold early this week hit a 6.5-year high, while silver today notched a two-plus year high. December gold futures were last down $11.60 an ounce at 1,537.50. December Comex silver prices were last down $0.171 at $18.28 an ounce.

A strong rally in the U.S. stock market today, as well as a higher U.S. dollar index, helped to put some pressure on the precious metals on this day.

Risk appetite up-ticked today on news reports that Chinese government officials (from the Commerce Ministry) have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. This news coming from China may or may not corroborate President Trump’s assertion earlier this week that a high-level Chinese trade official contacted the U.S. to restart trade negotiations.

Still, there are enough concerns on the geopolitical front to keep the safe-haven metals supported, overall. Civil unrest in Hong Kong, the Brexit matter that will heat up this fall, and slowing global economic growth are all still front-burner issues for traders and investors.

A slightly weaker than expected U.S. gross domestic product report today landed in the camp of the precious metals market bulls and U.S. monetary policy doves. The second estimate of second-quarter GDP was up 2.0%, year-on-year, versus up 2.1% in the initial reading. However, the 2.0% print was right in line with market expectations.

The other key “outside market” today sees Nymex crude oil prices up and trading around $56.50 a barrel.

Reuters