Gold Firmer On Safe-Haven Demand, But Profit-Taking Limits Gains

(Kitco News) - Gold prices ended the U.S. day session modestly higher and down from the session highs Monday. There was some more safe-haven demand featured in gold as world markets are still tense and volatile after the Brexit “leave” vote late last week. Gold prices last Friday hit a 27-month high. However, there was some profit-taking from the shorter-term futures traders Monday that took gold prices down from their daily highs. August Comex gold was last up $2.40 an ounce at $1,325.00. July Comex silver was last down $0.044 at $17.745 an ounce.

The key “outside markets” were in a bearish posture for the precious metals markets Monday, which also limited upside price action. The U.S. dollar index was sharply higher and crude oil prices were solidly lower.

The world marketplace is still feeling the hangover effects of last Thursday’s U.K. vote to leave the European Union. The short-term and long-term effects of the leave vote are being hotly debated, but one thing is certain and that’s uncertainty. Traders and investors hate uncertainty and that’s what’s boosting safe-haven assets like gold.

European stock markets were solidly lower overnight, with the U.S. Dow Jones Industrial average down over 200 points in U.S. afternoon trading. Asian stocks began to recover from the Brexit shock Monday as Chinese and Japanese stock markets posted overall gains. China’s central bank on Monday weakened its yuan currency against the U.S. dollar by the largest amount since last summer.

U.S. Treasury bond futures prices were up by over 3 full points, price-wise as safe-haven moves among traders and investors are in firmly in play. The British pound and Euro currency continued to get hammered Monday.  As long as the currency markets are roiled, sellers in safe-haven assets, including gold, will be scarce.

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Technically, August gold futures prices closed nearer the session low. The gold bulls have the solid overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,362.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,252.80. First resistance is seen at today’s high of $1,340.00 and then at $1,350.00. First support is seen at $1,318.90 and then at $1,308.00. Wyckoff’s Market Rating: 8.5

July silver futures prices closed nearer the session low on profit taking today. Prices Friday hit a 1.5-year high. The silver market bulls have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $17.94 and then at the May high of $18.08. Next support is seen at today’s low of $17.66 and then at $17.50. Wyckoff's Market Rating: 7.5.

July N.Y. copper closed up 110 points at 212.15 cents today. Prices closed near mid-range. Prices Friday hit a seven-week high today. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 225.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of 201.30 cents. First resistance is seen at today’s high of 213.90 cents and then at 215.00 cents. First support is seen at today’s low of 209.95 cents and then at 208.00 cents. Wyckoff's Market Rating: 5.0.

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