Gold Gains On Bargain Hunting, Bullish Charts

(Kitco News) - Gold prices ended the U.S. day session moderately higher Wednesday on a corrective bounce as traders once again “bought the dip” after Tuesday’s solid selling pressure. Gold bulls remain in firm near-term technical control of the charts, which is encouraging buying interest as such suggests the path of least resistance for prices will remain sideways to higher in the near term. August Comex gold was last up $8.70 an ounce at $1,343.90. September Comex silver was last up $0.249 at $20.42 an ounce.

Global stock markets were mostly firmer overnight as this week has seen a marked increase in investor risk appetite. U.S. stock indexes were just slightly lower in afternoon trading. World stock markets have made a dramatic rebound from the selling pressure that set in immediately after the late-June Brexit vote. The U.S. S&P 500 stock index is at a record high this week.

The key “outside markets” on Wednesday saw crude oil prices solidly lower after the International Energy Agency reported that record-high world crude oil stockpiles are threatening oil price stability. There was also a bearish weekly U.S. storage report today that showed U.S. crude oil stocks are at a record high. The U.S. dollar index was weaker today as trading is choppy in the index.

On Thursday the Bank of England meets to discuss U.K. monetary policy. Some believe the BOE will move to lower interest rates at the meeting, following the recent Brexit vote. New U.K. Prime Minister Theresa May was sworn in Wednesday.

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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 six-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 July high of $1,377.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,320.00. First resistance is seen at $1,350.00 and then at Tuesday’s high of $1,358.90. First support is seen at today’s low of $1,328.10 and then at $1,325.00. Wyckoff’s Market Rating: 7.5

September silver futures prices closed nearer the session high and closed at a two-year high close today. 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 the July high of $21.22 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.00. First resistance is seen at this week’s high of $20.76 and then at $21.000. Next support is seen at today’s low of $19.955 and then at $19.50. Wyckoff's Market Rating: 8.0.

September N.Y. copper closed up 310 points at 224.40 cents today. Prices closed near mid-range and hit a 10-week high today. The copper bulls have gained the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the March high of 232.95 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of 211.65 cents. First resistance is seen at today’s high of 227.75 cents and then at 230.00 cents. First support is seen at 222.00 cents and then at 220.00 cents. Wyckoff's Market Rating: 6.0.

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