Gold, Silver See Profit-Taking Pullback, But No Chart Damage

Gold, Silver See Profit-Taking Pullback, But No Chart Damage by Jim Wyckoff for KitCo News

Gold and silver prices are lower in midday U.S. trading Thursday, on some normal profit taking from the shorter-term futures traders and on downside corrections after prices hit a six-year high in gold and a 13-month high in silver Wednesday. The global marketplace was calmer Thursday, following the keener anxiety seen among traders and investors on Wednesday. That allowed the world stock markets to rebound and bond yields to recover, pressure the safe-haven metals. December gold futureswere last down $12.20 an ounce at 1,507.40. September Comex silver prices were last down $0.261 at $16.935 an ounce.

Some upbeat economic data coming out of China and the U.S. also aided the stock market bulls today. China’s exports rebounded in July, rising 3.3%, year-on-year, and compares to a 1.3% decline reported for June. China’s exports in July were expected down 2.0%. Meantime, China’s July imports were down 5.6%, year-on-year.

Importantly, Kitco readers should not conclude the fireworks in the marketplace have just quickly fizzled. Look for more volatility and uneasiness in the coming weeks, which should continue to benefit the gold and silver markets. Remember that the historically stock-market-turbulent months of September and October are around the corner.

China’s central bank on Thursday set its currency, the yuan, exchange rate with the U.S. dollar at 7.0039. That’s the weakest yuan fixing set by the central bank in 11 years, and is above the 7 level that the U.S. has ostensibly deemed problematic. This exchange rate will continue to be closely monitored. The U.S. designated China as a currency manipulator earlier this week.

The key “outside markets” today see Nymex crude oil prices solidly higher and trading around $52.50 a barrel. The U.S. dollar indexis near steady in midday action.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures prices closed nearer the session low. The bulls still have the strong overall near-term technical advantage. A nine-week-old uptrend is in place on the daily bar chart. There are still no early chart clues to suggest a market top is close at hand. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,550.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,467.00. First resistance is seen at this week’s high of $1,522.70 and then at $1,525.00. First support is seen at $1,500.00 and then at $1,490.00. Wyckoff’s Market Rating: 8.5

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