Gold Surges To 2-Yr. High Above $1,315, But Then Backs Well Off Daily High as U.S. Equities Recover

(Kitco News) - The gold market early Thursday pushed to a two-year high of $1,316.80 an ounce, basis August Comex futures. However, prices had backed well down from the daily highs in early afternoon trading, as U.S. stock indexes rebounded from their session lows and as the key “outside markets” were in a bearish daily posture for the precious metals—lower crude oil prices and a higher U.S. dollar index. August Comex gold was last up $8.20 an ounce at $1,296.90. July Comex silver was last up $0.077 at $17.58 an ounce.

Gold is being supported by the perceived dovish FOMC statement on Wednesday and on safe-haven demand amid wobbly world stock markets and falling world government bond yields. World stock markets were mostly weaker Thursday, amid some keener risk aversion in the marketplace. U.S. stock indexes were just slightly lower and well up from their daily lows in early afternoon New York trading.

The Bank of England and the Bank of Japan left their interest rates unchanged, as expected, at their latest monetary policy meetings Thursday. Asian stock markets were lower partly on disappointment the BOJ did not announce further economic stimulus measures at Thursday’s meeting.

There are growing concerns about next week’s U.K. vote on whether that country stays in the European Union. Recent U.K. polls show the “leave” camp is leading the “stay” camp, which has created much uncertainty and anxiety in the marketplace—and is helping push safe-haven gold higher and world government bond market yields lower. The survivability of the European Union in its present form could depend on a “no” Brexit vote next week.

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Technically, August gold futures prices closed near mid-range and hit a two-year high of $1,318.90 today. The gold bulls have the solid overall near-term technical advantage and have upside momentum. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of $1,275.20. First resistance is seen at today’s high of $1,318.90 and then at $1,325.00. First support is seen at $1,300.00 and then at today’s low of $1,293.20. Wyckoff’s Market Rating: 8.0

July silver futures prices closed near mid-range and hit a six-week high today. The silver market bulls have the firm overall near-term technical advantage and have momentum. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $18.06 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.755. First resistance is seen at today’s high of $17.88 and then at $18.06. Next support is seen at today’s low of $17.55 and then at this week’s low of $17.105. Wyckoff's Market Rating: 7.5.

July N.Y. copper closed down 430 points at 204.80 cents today. Prices closed nearer the session low today. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 214.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the January low of 195.80 cents. First resistance is seen at today’s high of 209.30 cents and then at this week’s high of 211.90 cents. First support is seen at today’s low of 203.55 cents and then at last week’s low of 201.30 cents. Wyckoff's Market Rating: 2.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com