Gold Sees Pause After Recent Solid Gains
New York (June 26) Gold prices are slightly down but well up from daily lows in midday U.S. trading Wednesday. Some profit taking from the shorter-term futures traders and chart consolidation are featured after prices hit a six-year high of $1,442.90 in August futures on Tuesday. Bulls still have the solid technical advantage. August gold futures were last down $1.10 an ounce at 1,417.60. July Comex silver prices were last up $0.015 at $15.315 an ounce.
There were no major news developments Wednesday, which also allowed the gold market to pause.
The markets were just slightly rattled Tuesday afternoon when Federal Reserve Chairman Jerome Powell said the Fed will not be pressured into cutting U.S. interest rates without the economic data to back any cut. U.S. stocks backed off a bit on Powell’s remarks.
A main focus of the marketplace at mid-week is the late-week meeting between U.S. President Trump and Chinese President Xi in Japan at the G20 confab—possibly after all the markets are closed on Friday. The two will discuss their ongoing trade war. The outcome of that meeting is uncertain and could have major implications for many markets. As has been the case since the trade war began, there are conflicting comments coming from the U.S. side. Reports attributed to U.S. trade officials Tuesday played down any significant progress to be expected at the summit meeting, other than a pledge that both sides will keep talking. The U.S. stock markets has somewhat reacted positively Wednesday morning to a comment from U.S. Treasury Secretary Mnuchin today, saying a U.S.-China trade deal is “90 percent done.”
The Iran-U.S. confrontation has turned to a war of words this week. Both sides are tossing harsh rhetoric at each other. This situation is bullish for safe-haven gold and for crude oil, and is not likely to de-escalate any time soon.
In other news, Bitcoin is posting gains of over $1,200 today, hit a 17-month high, and is trading around $12,500. Part of the buying in the crypto currency is tied to the recent news that FaceBook is launching its own digital currency.
The key “outside markets” today see Nymex crude oil prices solidly higher, at a four-week high, and trading around $59.50 a barrel. Meantime, the U.S. dollar index is weaker. The USDX hit a three-month low Tuesday.
Live 24 hours gold chart [Kitco Inc.]
Technically, August gold futures prices closed near mid-range. The bulls still have the solid overall near-term technical advantage amid a steep four-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,400.00.
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