Gold prices back off a bit on some profit taking

New York (June 30)  Gold prices are modestly down in early U.S. trading Tuesday, on some normal profit taking by the shorter-term futures traders. However, don’t be surprised to see the powerful yellow metal bulls once again step in to buy the dip in a technically very strong market. August gold futures were last down $2.70 an ounce at $1,778.60. September Comex silver prices were last up $0.021 at $18.085 an ounce.

Global stock markets were mixed in overnight trading, on this last day of the month and of the second quarter. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Risk appetite has receded a bit recently amid the Covid-19 resurgence in many countries, including the U.S., where several hotspot states are starting to shut down businesses again.

U.S. Federal Reserve Chairman Jerome Powell will testify to a congressional committee today. In prepared remarks, he said the U.S. economy has rebounded faster than expected from Covid-19 damage to businesses, but also said there are still challenges, most notably keeping the pandemic contained. U.S. Treasury Secretary Steven Mnuchin will also testify to the House committee today.

In overnight news, China’s government put into effect its so-called national security law to tighten its grip on Hong Kong. Meantime, there is a brewing geopolitical rift between the U.S. and Russia after reports surfaced that Russia offered the Taliban bounties to kill U.S. soldiers.

It's a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%.

The important outside markets today see Nymex crude oil prices weaker and trading around $39.00 a barrel. The U.S. dollar index is firmer early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.63% level.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the S&P Core Logic Case Shiller home indexes, the ISM Chicago business survey, the consumer confidence index.

Technically, the gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,754.00. First resistance is seen at Monday’s high of $1,790.40 and then at the June high of $1,796.10. First support is seen at $1,764.10 and then at last week’s low of $1,754.00. Wyckoff's Market Rating: 8.0

September silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $19.125 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the June low of $17.175. First resistance is seen at Monday’s high of $18.285 and then at last week’s high of $18.425. Next support is seen at Monday’s low of $17.935 and then at last week’s low of $17.595.

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