Gold Push Off Lows; The Calm Before The Storm?

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(Kitco News) - Gold and silver prices were ending the U.S. day session slightly higher Tuesday. There were no major markets news events occurring today to move the precious metals markets. August Comex gold was last up $1.50 an ounce at $1,214.80. September Comex silver was last up $0.116 at $15.745 an ounce.

While the summertime doldrums appear to be gripping some markets at present, including many world stock markets, there are potentially destabilizing elements lurking on the horizon of the marketplace, which could (and at some point likely will) push safe-haven gold prices higher.

There is presently a fairly quiet geopolitical front that will likely not stay that way for long. The U.S.-North Korea stare-down and the still potentially volatile Middle East are two major powder kegs that have short fuses.

Also, many world stock markets have been in rally mode for months, or longer, to make those bull market runs very mature. After the summertime lethargy passes and trading action moves into the autumn, don’t be surprised to see more active stock markets—and metals markets. Remember, history shows the months of September and October have been historically unkind to stock markets. Once money starts to flow out of the world stock markets (and it will at some point) the competing asset class gold will see solid benefits.

The key “outside markets” on Tuesday saw Nymex crude oil futures higher on short covering and trading above $45.00 a barrel. Goldman Sachs has reportedly said oil prices could fall below $40.00 a barrel if OPEC cannot move to further curtail its oil production. The oil market bears are in firm near-term technical control. Meantime, the U.S. dollar index was slightly lower early this afternoon. The greenback bears also have the firm near-term technical advantage amid a price downtrend.

It’s been a light week of U.S. economic reports, so far. However, the U.S. data pace picks up markedly Wednesday and the rest of this week, including testimony to Congress from Federal Reserve Chair Janet Yellen, the producer price index, consumer price index and retail sales.

Technically, August gold futures prices closed nearer the session high. The market is trying to stabilize after hitting a nearly four-month low on Monday. The gold bears still have the firm overall near-term technical advantage as prices are in a five-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 $1,240.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at $1,217.80 and then at $1,225.00. First support is seen at this week’s low of $1,204.00 and then at 1,200.00. Wyckoff's Market Rating: 3.0

September silver futures prices closed nearer the session high today on more tepid short covering after hitting a 15-month low on Monday. The silver bears still have the solid overall near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at $16.00 and then at $16.20. Next support is seen at today’s low of $15.425 and then at this week’s low of $15.145. Wyckoff's Market Rating: 2.0.

September N.Y. copper closed up 285 points at 267.60 cents today. Prices closed near the session high today. The copper bulls have the slight overall near-term technical advantage. Prices are in a nine-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 284.95 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 269.15 cents and then at the June high of 271.85 cents. First support is seen at 265.00 cents and then at this week’s low of 263.10 cents. Wyckoff's Market Rating: 5.5.