Gold Slightly Down, But The Market Has Stabilized

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(Kitco News) - Gold prices were trading slightly lower heading into the U.S. futures close Thursday. However, the bulls can take some solace from their ability to stop the strong selling pressure that had been prevalent the past two weeks. And if the bulls can produce a technically friendly weekly high close in gold on Friday, such would be an early chart clue that a near-term market bottom is in place.August Comex gold was last down $1.40 an ounce at $1,217.70. September Comex silver was last down $0.177 at $15.71 an ounce.

The key U.S. economic report of the day Thursday was the producer price index for June, which came in at up 0.1% from May. An unchanged reading from May was expected. Also, the latest weekly U.S. jobless claims report showed a decline of 3,000 claims. Both reports had very little impact on the markets.

Fed Chair Janet Yellen spoke again today in front of the U.S. Senate. Her question-and-answer session was monitored closely, but her remarks were not much different than those she delivered to House committee members on Wednesday. On Wednesday Yellen sounded a surprisingly dovish tone on U.S. monetary policy, which rallied many markets and gave gold and silver a slight lift.

In other news Thursday, China’s exports rose by 11.3% in June, from the same period last year, while its imports rose by 17.2% in that timeframe. Those numbers were slightly above market expectations and were also and underlying positive element for the raw commodity market sector, including the precious metals. China is the world’s leading raw commodity importer.

The “outside markets” on Thursday saw Nymex crude oil futures firmer on short covering. An IEA report out today said world oil demand is on the rise. The crude oil market bears remain in firm near-term technical control.

Meantime, the U.S. dollar index was slightly higher in choppy trading again today. The more dovish tone on U.S. monetary policy delivered by Yellen in her remarks Wednesday did limit the upside for the dollar. The greenback bears have the firm near-term technical advantage amid a price downtrend.

Technically, August gold futures prices closed nearer the session low today. The bulls have stabilized the gold market after it hit a nearly four-month low on Monday. The gold bears do still have the 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 this week’s high of $1,225.20 and then at $1,230.00. First support is seen at Wednesday’s low of $1,212.50 and then at this week’s low of $1,204.00. Wyckoff's Market Rating: 3.0

September silver futures prices closed nearer the session low today. The silver bears 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 Tuesday’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 down 185 points at 266.55 cents today. Prices closed nearer the session low 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 270.00 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.