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Gold gains a bit on some safe-haven demand, bargain buying
2021-08-27 10:03:34

Gold gains a bit on some safe-haven demand, bargain buying

Kitco News

(Kitco News) - Gold prices are modestly higher in midday U.S. trading, on some safe-haven demand and bulls taking advantage of the earlier dip in prices to do some bargain hunting. Silver prices are moderately lower. October gold futures were last up $3.50 at $1,792.30. September Comex silver was last down $0.21 at $23.565 an ounce.

A terrorist attack at the airport evacuating people from Afghanistan put a bit of a scare into the marketplace as the stock market weakened slightly, and in turn pushed gold prices mildly up.

The highly anticipated annual Federal Reserve symposium being held in Jackson Hole, Wyoming late this week saw Kansas City Fed President Esther George Thursday morning say on CNBC that recent stronger U.S. economic data is cause for the U.S. central bank to begin to discuss tightening its monetary policy—despite the growing concerns about the resurgence of the coronavirus and its potential impact on the U.S. and global economies. George said the virus remains a concern for economic growth but implied recent stronger U.S. economic reports warrant the Fed making plans to reel in easy-money policies presently in place "sooner rather than later."

Meantime, St. Louis Federal Reserve president James Bullard, in a CNBC interview, echoed George's assessment that U.S. monetary policy is too loose and needs to be "tapered." Fed Chair Jerome Powell is slated to speak virtually on Friday.

Dallas Fed president Robert Kaplan also chimed in and said an announcement of a reduction in bond buying at the September FOMC meeting would be prudent.

Many traders and investors had believed the Federal Reserve would extend its easy-money policies for a longer period of time than they had planned just a few weeks ago, due to the spreading Covid delta variant. Powell may still feel that way, but Fed officials George, Kaplan and Bullard are leaning hawkish. Those hawkish comments today did limit buying interest in gold and silver markets.

Today's U.S. GDP report for the second quarter showed a 6.6% growth rate versus 6.5% reported in the first GDP estimate for the second quarter. The closely watched PCE price index of the GPD report came in at up 6.5% versus the first estimate of up 6.4%. The Fed's Bullard on CNBC said the PCE index and price inflation in general is "higher than we'd expected." The PCE index is just one more indicator that inflation is running too hot.

The key outside markets today see the U.S. dollar index firmer and still trending higher. Nymex crude oil futures prices are weaker and trading around $68.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.346%. U.S. bond yields are in the rise this week, hinting that bond traders are at least a bit worried about a hawkish U.S. monetary policy tone coming from the Fed at this week's Jackson Hole confab.

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bulls have the slight overall near-term technical advantage. A price uptrend is still in place on the daily bar chart, but the bulls need to show more power soon to keep it alive. Bulls' next upside price objective is to produce a close above solid resistance at the August high of $1,833.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,800.00 and then at this week's high of $1,809.80. First support is seen at today's low of $1,779.20 and then at this week's low of $1,775.90. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $22.295. First resistance is seen at $24.00 and then at $24.38. Next support is seen at today's low of $23.44 and then at $23.00. Wyckoff's Market Rating: 3.0.

September N.Y. copper closed down 255 points at 424.25 cents today. Prices closed near mid-range today. The copper bears still have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 443.10 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 396.15 cents. First resistance is seen at this week's high of 430.25 cents and then at 435.00 cents. First support is seen at Tuesday's low of 419.05 cents and then at this week's low of 412.90 cents. Wyckoff's Market Rating: 4.0.





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