Gold Ends Slightly Up As Outside Markets Turn Bullish

(Kitco News) - Gold prices ended the U.S. day session with minor gains Wednesday, boosted in part by the sharp drop in the U.S. dollar index the past two days that pushed it to a seven-month today.  Some short covering in the futures market and perceived value-buying in the cash market were featured again today, after gold and silver prices hit multi-week lows earlier this week. August Comex gold was last up $2.50 an ounce at $1,249.50. September Comex silver was last up $0.154 at $16.805 an ounce.

It was a quieter day in the world marketplace today, which gave traders and investors a chance to digest Tuesday’s big news events. A more hawkish tone on monetary policy in a speech delivered by European Central Bank President Mario Draghi on Tuesday pushed the Euro currency sharply higher, to a seven-month high, and saw the biggest one-day gains in over a year. Draghi’s comments have also pushed European and world bond market yields higher the past two days. Meantime, the U.S. Senate on Tuesday postponed until after its July Fourth holiday recess an attempt to push through legislation on health care reforms. That news helped to sink the U.S. stock market Tuesday. However, today the U.S. stock market was back in rally mode, which did limit the upside in the gold and silver markets.

The key “outside markets” on Wednesday saw Nymex crude oil futures prices modestly higher on more short covering. The oil market bears still have the solid overall near-term technical advantage. Meantime, the U.S. dollar index was solidly lower again today and hit a seven-month low, on good follow-through selling pressure after very strong losses seen Tuesday. The greenback bears have the solid overall near-term technical advantage.

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Technically, August gold futures prices closed nearer the session low. The gold bears still have the overall near-term technical advantage as prices are in a three-week-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,270.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,217.80. First resistance is seen at today’s high of $1,255.70 and then at last week’s high of $1,260.00. First support is seen at Tuesday’s low of $1,241.80 and then at this week’s low of 1,236.50. Wyckoff's Market Rating: 4.0

September silver futures prices closed near mid-range today on more short covering. The silver bears still have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.125. First resistance is seen at today’s high of $16.89 and then at $17.00. Next support is seen at $16.55 and then at this week’s low of $16.28. Wyckoff's Market Rating: 3.5.

September N.Y. copper closed up 135 points at 267.50 cents today. Prices closed nearer the session high and hit a two-month high today. The key “outside markets” were in a daily bullish posture for copper today, as the U.S. dollar index was lower and hit a seven-month low, while crude oil prices were higher. The copper bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the June low of 252.90 cents. First resistance is seen at today’s high of 267.70 cents and then at 270.00 cents. First support is seen at Tuesday’s low of 262.60 cents and then at 260.00 cents. Wyckoff's Market Rating: 6.0.