Gold Boosted by Bullish “Outside Markets”

(Kitco News) - Gold prices ended the U.S. day session moderately higher Thursday, supported by a lower U.S. dollar index and higher crude oil prices. December Comex gold was last up $8.00 an ounce at $1,357.00. September Comex silver was last up $0.102 at $19.75 an ounce.

The marketplace is focused on the slumping U.S. dollar index, which hit a seven-week low overnight. The weakening greenback is a bullish element for the raw commodity sector. Most major raw commodities on the world marketplace are priced in U.S. dollars. When the dollar depreciates against the other currencies, it makes commodities cheaper to purchase with non-U.S. currency.

Also, Nymex crude oil prices were solidly higher Thursday, hit a five-week high and are closing in on $50.00 a barrel amid a steep two-week-old uptrend.

Global stock markets were mixed Thursday, following the Wednesday afternoon release of the June FOMC minutes report from the Federal Reserve. The minutes showed FOMC members remained divided on when to make the next interest rate hike. After initially reading the FOMC minutes as leaning toward the hawkish side on monetary policy, upon further digesting the report the marketplace has deemed the minutes as slightly dovish. U.S. stock indexes were narrowly mixed in afternoon New York trading.

In overnight news, inflation in the Euro zone fell 0.6% in July from June, but were up 0.2%, year-on-year. The readings are well below the 2.0% annual inflation mark that the European Central Bank has targeted.

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Technically, December gold futures prices closed near mid-range. The gold bulls have the overall near-term technical advantage, but trading remains been choppy and sideways. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the August high of $1,374.20. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the July low of $1,318.50. First resistance is seen at this week’s high of $1,364.30 and then at $1,374.20. First support is seen at $1,350.00 and then at this week’s low of $1,340.50. Wyckoff’s Market Rating: 7.0

September silver futures prices closed nearer the session low. The silver market bulls have the overall near-term technical advantage, but trading has been choppy recently. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.225 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 $20.00 and then at this week’s high of $20.12. Next support is seen at this week’s low of $19.375 and then at $19.27. Wyckoff's Market Rating: 6.5.

September N.Y. copper closed up 155 points at 216.75 cents today. Prices closed near mid-range. The copper bears have the overall near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 227.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of 211.65 cents. First resistance is seen at today’s high of 218.90 cents and then at 220.00 cents. First support is seen at today’s low of 215.55 cents and then at this week’s low of 213.30 cents. Wyckoff's Market Rating: 3.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff