Gold Solidly Up, Silver Hits 2-Year High, On Safe-Haven Demand

(Kitco News) - Gold futures prices closed at a 27-month high close Tuesday, on more safe-haven demand amid risk aversion among traders and investors on this first U.S. trading day of the week. Meantime, silver prices soared to a two-year high of $21.22 overnight, basis September Comex futures, before backing well off that high. August Comex gold was last up $19.40 an ounce at $1,358.40. September Comex silver was last up $0.422 at $20.015 an ounce.

There was some anxiety in the marketplace Tuesday, following a three-day holiday weekend in the U.S. The U.S. Treasury market rallied strongly and Asian traders were snapping up the Japanese yen Tuesday, on safe-haven demand. The U.S. dollar index also rebounded strongly Tuesday in U.S. trading, following overnight selling pressure. World stock markets were mostly weaker Tuesday and U.S. stock indexes are were lower in afternoon New York trading.

There is still lingering uneasiness in the marketplace following the U.K. vote to leave the European Union (Brexit) that occurred in late June—not only on behalf of the U.K., but also on behalf of the European Union.

The Bank of England Tuesday announced it was easing its monetary policy by loosening capital requirements in order to boost lending. The BOE move came as the British pound fell to a new 31-year low against the U.S. dollar Tuesday.

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Technically, August gold futures prices closed nearer the session high. The gold bulls have the solid overall near-term technical advantage. Prices are in a five-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 the June high of $1,362.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,330.00. First resistance is seen at $1,362.60 and then at $1,375.00. First support is seen at today’s low of $1,338.50 and then at $1,325.00. Wyckoff’s Market Rating: 8.0

Technically, August gold futures prices closed nearer the session high. The gold bulls have the solid overall near-term technical advantage. Prices are in a five-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 the June high of $1,362.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,330.00. First resistance is seen at $1,362.60 and then at $1,375.00. First support is seen at today’s low of $1,338.50 and then at $1,325.00. Wyckoff’s Market Rating: 8.0

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