Gold Down, But Oversold And Due For Good Bounce

(Kitco News) - Gold and silver prices were moderately lower in early-afternoon U.S. trading Wednesday. Gold hit a six-month low and silver dropped to a seven-week low today. However, the gold market is now well oversold on a near-term technical basis and due for a decent corrective rebound very soon. Also, the big rally in crude oil recently is a solid clue the raw commodity sector has bottomed out and will see better days just ahead. August gold futures were last down $4.30 an ounce at $1,255.50. July Comex silver was last down $0.105 at $16.145 an ounce.

There are lingering concerns about a global trade war among the major economies that are weighing on the global equities markets. However, most would not consider the trading environment as “risk-averse” at this time—at least not enough to boost safe-haven gold and silver markets.

The key “outside markets” today find the U.S. dollar index solidly higher. That was bearish for the metals today, too. However, Nymex crude oil prices are solidly higher, hit a three-year high, and traded above $73.00 a barrel for a while. The U.S. on Tuesday said it would have “zero tolerance” for Iran exporting its oil to other countries.

Technically, the gold bears have the firm overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. However, the market is now short-term oversold and due for a corrective bo0unce. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,286.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,251.90. First resistance is seen at today’s high of $1,261.90 and then at Tuesday’s high of $1,269.40. First support is seen at today’s low of $1,253.30 and then at $1,251.90. Wyckoff's Market Rating: 2.5

The silver bears have the firm 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 $16.07. First resistance is seen at today’s high of $16.295 and then at $16.50. Next support is seen at $16.07 and then at $16.00. Wyckoff's Market Rating: 2.5.

July N.Y. copper closed down 45 points at 298.75 cents today. Prices closed nearer the session high and hit another three-month low early on on Monday. The copper bears have the overall near-term technical advantage amid the recent steep sell off. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 315.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 295.85 cents. First resistance is seen at today’s high of 300.45 cents and then at this week’s high of 304.50 cents. First support is seen at 295.85 cents and then at 292.50 cents. Wyckoff's Market Rating: 3.0.