(Kitco News) – Gold prices are moderately higher in early morning U.S. trading Wednesday. At mid-week there is somewhat heightened trader/investor risk aversion, as evidenced by lower world stock markets today. August gold futures were last up $8.10 an ounce at $1,339.20. July Comex silver prices were last up $0.07 at $14.81 an ounce.
European and Asian stock indexes were mostly lower overnight. The U.S. stock indexes are also pointed toward weaker openings when the New York day session begins. The U.S. indexes at mid-week have ended an impressive rally streak that lifted prices well up from the early-June three-month lows.
It appears that global economic growth and world trade concerns are more on traders’ and investors’ mind at mid-week, putting them in a mood for buying safe-haven metals and selling equities.
The just-released U.S. economic data point of the day is the consumer price index report for May, which came in at up 0.1% from April, which was right in line with market expectations. The CPI rose 0.3% last month. Very low worldwide inflation levels in major economies is giving central bankers more leeway to ease their monetary policies.
In overnight news, China’s May consumer price index hit a 15-month high, at up 2.7%, year-on-year. The CPI was up 2.5% in April. Food prices led the rise in CPI, with pork prices up 18%.
The key “outside markets” today see Nymex crude oil prices solidly lower and trading just below $52.00 a barrel, on world economic growth worries. The U.S. dollar index is near steady, but is in a near-term price downtrend and there are chart clues the USDX has put in a near-term top.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the consumer price index, real earnings, the weekly DOE liquid energy stocks report and the monthly Treasury budget statement.
Technically, the gold bulls have the overall near-term technical advantage and regained momentum today. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at the June high of $1,352.70. Bears’ next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,300.00. First resistance is seen at today’s high of $1,342.30 and then at $1,350.00. First support is seen at today’s low of $1,329.80 and then at this week’s low of $1,323.60. Wyckoff’s Market Rating: 6.5
July silver futures bears still have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s 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 the overnight high of $14.86 and then at $15.00. Next support is seen this week’ low of $14.625 and then at last week’s low of $14.565. Wyckoff’s Market Rating: 3.0.
By Jim Wyckoff
For Kitco News