Gold Price Stages Modest Rally On Short Covering, Bargain Buying

New York (July 31)  Gold prices are moderately up in early-afternoon U.S. trading Tuesday. Some short covering in the futures market and perceived bargain buying in the cash market are featured. Also, the last trading day of the month today likely prompted some position evening in the metals, most of which being short covering. Still, the low risk aversion in the world marketplace at present continues to weigh on the safe-haven metals. December gold futures were last up $4.00 an ounce at $1,235.60. September Comex silver was last up $0.063 at $15.60 an ounce.

In focus this week is central bank meetings of the U.S., the Bank of Japan and the Bank of England. The BOJ today left its interest rates unchanged, as expected, but did surprise the marketplace by reiterating it will maintain its ultra-low interest rates and easy monetary policy. Only the BOE is expected to make any policy move—raising its interest rates slightly. The FOMC meeting of the Federal Reserve began Tuesday morning and ends Wednesday afternoon with a statement.

The key “outside markets” today find Nymex crude oil prices lower and trading just below $69.00 a barrel. Meantime, the U.S. dollar index is firmer today.

Technically, the gold bears still have the solid overall near-term technical advantage. There are still no strong, early clues to suggest a market bottom is close at hand.  A 3.5-month-old downtrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,237.80 and then at last week’s high of $1,244.70. First support is seen at $1,230.00 and then at $1,225.00. Wyckoff's Market Rating: 2.0

The silver bears have the solid overall near-term technical advantage. There are still no early clues to suggest a market bottom is close at hand. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at last week’s high of $15.70 and then at $15.90. Next support is seen at today’s low of $15.38 and then at the July low of $15.185. Wyckoff's Market Rating: 2.5.

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