Gold Up, Silver Hits 21-Mo. High, Amid Bullish Outside Markets, Technical Buying

(Kitco News) - Gold prices ended the U.S. day session moderately higher Wednesday, on technically related buying as the bulls remain in firm near-term control of the charts. Bulls are also encouraged by safe-haven gold’s ability to show resilience amid better risk appetite in the marketplace at mid-week. Meantime, silver prices were sharply higher hit a 21-month high Wednesday. August Comex gold was last up $9.10 an ounce at $1,326.90. July Comex silver was last up $0.512 at $18.355 an ounce.

The key “outside markets” were in a bullish posture for the precious metals markets today, as the U.S. dollar index is weaker on a corrective pullback from recent strong gains. Meantime, Nymex crude oil prices were higher today and have rebounded nicely from the recent Brexit-related selling pressure.

Global stock markets were mostly higher Wednesday and U.S. stock indexes were higher in afternoon New York trading. The past two days of upside price action in most world stock markets suggests most traders and investors may have over-reacted to last week’s Brexit “leave” vote. The British pound and Euro currency have also rallied off of their lows following the pounding they took after last week’s Brexit vote.

However, the benchmark European government bond—the 10-year German bund—still sees its yield in negative territory at present. This suggests there remains keen uncertainty exhibited by the Europeans, regarding the survival of the European Union, in its present form, in the months and years ahead. Such also suggests there will continue to be a flow of safe-haven demand for gold during that same timeframe.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Technically, August gold futures prices closed nearer the session high today. The gold bulls have the solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. 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 $1,331.00 and then at $1,340.00. First support is seen at today’s low of $1,313.30 and then at this week’s low of $1,308.20. Wyckoff’s Market Rating: 7.5

July silver futures prices closed nearer the session high and hit a 21-month high today. The silver market bulls have the solid overall near-term technical advantage and gained fresh power today. 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 last week’s low of $17.105. First resistance is seen at today’s high of $18.515 and then at $18.75. Next support is seen at $18.00 and then at today’s low of $17.80. Wyckoff's Market Rating: 8.0.

July N.Y. copper closed up 120 points at 218.25 cents today. Prices closed nearer the session high and hit another seven-week high today. The key “outside markets” were bullish for gold today as the U.S. dollar index was lower and crude oil prices were higher. The copper bulls have the overall near-term technical advantage. A bullish “rounding-bottom” reversal pattern has formed on the daily bar chart. 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 219.00 cents and then at 220.00 cents. First support is seen at today’s low of 215.80 cents and then at Tuesday’s low of 211.85 cents. Wyckoff's Market Rating: 6.0.

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