Gold prices power to 9-yr. high; more upside likely
New York (July 7) Gold prices are solidly up in midday U.S. trading Tuesday and notched a nearly nine-year high of $1,810.80 as of this writing. Tuesday’s early, routine downside correction following recent gains was once again seen as a value-buying opportunity in the yellow metal, on strong notions more price appreciation lies ahead. Gold and silver markets remain firmly bullish from a charts perspective, which continues to invite technically oriented buyers. August gold futures were last up $14.80 an ounce at $1,808.30. September Comex silver prices were last up $0.073 at $18.66 an ounce.
Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are mixed but mostly weaker at midday. There are growing notions the global stock markets have come too far, too fast, which is also prompting some safe-haven demand for gold and silver.
Ideas that central banks will have a reckoning in the coming months, after flooding world financial systems with cash in recent months, is also supportive for the metals markets, as they are historically a hedge against problematic inflation.
There were some downbeat economic projections released Tuesday from the OECD think tank and the European Commission. The OECD said global unemployment in 2020 will be the highest since the Great Depression of the 1930s. The EC said the Euro zone economy will shrink by 8.3% this year, which is a greater decline than its earlier forecast of minus 7.4%. German industrial production also came in weaker than expected today.
The important outside markets today see Nymex crude oil prices near steady and trading around $40.70 a barrel. The U.S. dollar index is slightly higher at midday. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.65% level.
Technically, August gold bulls have the strong overall near-term technical advantage, to suggest still more upside in the near term. Prices are in a four-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 $1,850.00. Bears' next near-term downside price objective is pushing prices below solid technical support at $1,754.00. First resistance is seen at today’s high of $1,810.80 and then at $1,820.00. First support is seen at $1,789.00 and then at today’s low of $1,781.20.
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