Gold Sees Pressure on Profit Taking, Rallying U.S. Dollar Index

New York (July 22)  Gold prices ended the U.S. day session moderately lower Tuesday, on some profit-taking by the shorter-term traders and on some technical chart consolidation.  A firmer U.S. dollar index Tuesday, in which prices hit a five-week high, was also bearish for the precious metals markets. Less risk aversion in the market place Tuesday was also a bit negative for safe-haven gold. August Comex gold was last down $7.00 at $1,307.00 an ounce. Spot gold was last quoted down $6.20 at $1,306.50. December Comex silver last traded steady at $21.07 an ounce.

There was a bit more investor and trader risk appetite in the market place Tuesday, as U.S. and some other major world stock indexes traded higher. However, geopolitics remains on the front burner of the market place. Tensions in Israel and Ukraine remain high. Pundits are now saying the U.S.-Russia relations have deteriorated to Cold War levels. Gold, U.S. Treasuries and the U.S. dollar are safe-haven assets that have been supported from the heightened world tensions. I suspect that for the near term, trading action in many markets will day to day swing from risk-on to risk-off, depending on the news headlines of that day.

It was a busier day for U.S. economic data Tuesday. Data out included the weekly Johnson Redbook and Goldman Sachs retail sales reports, the consumer price index, real earnings, the monthly U.S. house price index, existing home sales and the Richmond Fed business survey. The consumer price index was the most important report Tuesday. However, that reading came in as expected—up 0.3% in June—and the markets saw no significant price reactions.

The London P.M. gold fix was $1,310.25 versus the previous A.M. fixing of $1,307.00.

Technically, August gold futures prices closed nearer the session low Tuesday. Gold bulls and bears are on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,346.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the July low of $1,292.60. First resistance is seen at Tuesday’s high of $1,316.80 and then at this week’s high of $1,319.00. First support is seen at Tuesday’s low of $1,302.20 and then at $1,300.00. Wyckoff’s Market Rating: 5.0

December silver futures closed nearer the session high Tuesday. The bulls have the slight near-term technical advantage amid recent choppy trading. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.67 an ounce.

Source: KitcoNews