Gold Prices See Normal Corrective Pullback

(Kitco News) – Gold prices are modestly down in early morning U.S. trading Monday, on a normal downside correction after hitting a 13-month high late last week. August gold futures were last down $3.00 an ounce at $1,341.60. July Comex silver prices were last up $0.057 at $14.855 an ounce.

Markets are quieter early this week as traders and investors worldwide are awaiting the Federal Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement. FOMC members will discuss U.S. monetary policy. Most believe the Fed will not raise interest rates at this meeting, but members may lean toward a more dovish stance on monetary policy, to set the table for a rate hike in the coming few months.

There were no major news developments on the geopolitical front over the weekend, including no escalation of the U.S.-Iran tensions following last week’s attacks on big ships in the Gulf of Oman that the U.S. blamed on Iran. Iran’s leader did make some bellicose remarks about the U.S. and its nuclear ambitions, but the marketplace has brushed them off. Still, this matter is not likely to just fade away and remains a bullish element for the safe-haven metals.

European stock indexes were mostly firmer overnight, while Asian shares were mixed. The U.S. stock indexes are also pointed toward slightly higher openings when the New York day session begins.

The key “outside markets” today see Nymex crude oil prices slightly weaker and trading around $52.00 a barrel. Meantime, the U.S. dollar index is slightly down in early U.S. trading.

U.S. economic data due for release Monday includes the Empire State manufacturing survey and the NAHB housing market index.

Technically, the gold bulls have the firm overall near-term technical advantage. Prices are in a choppy, seven-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at last week’s high of $1,362.20. Bears’ next near-term downside price breakout objective is pushing August futures prices below solid technical support at last week’s low of $1,323.60. First resistance is seen at today’s high of $1,347.10 and then at $1,350.00. First support is seen at today’s low of $1,336.60 and then at $1,330.00. Wyckoff’s Market Rating: 7.0

July silver futures bears have the overall near-term technical advantage. However, prices are in a three-week-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the June high of $15.15 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $14.265. First resistance is seen at $15.00 and then at $15.15. Next support is seen at $14.75 and then at last week’s low of $14.625. Wyckoff’s Market Rating: 3.5.

By Jim Wyckoff
For Kitco News


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