Gold, Silver See Modest Gains As World Equities Sell Off

(Kitco News) - Gold prices are modestly higher in early-afternoon U.S. trading Wednesday. U.S. and world equity markets are under selling pressure at mid-week, amid some geopolitical concerns that are prompting just a bit of safe-haven demand for gold. June gold futures were last up $3.30 an ounce at $1,285.80. July Comex silver prices were last up $0.09 at $14.41 an ounce.

Stock markets are pressured today as risk aversion is back on the front burner of the marketplace. The main concern is the prolonged trade war between the U.S. and China (the world’s two largest economies) that sees no end in sight and appears to be escalating. U.S. stock indexes are pointed toward lower openings when the New York day session begins.

Also unnerving European traders is news today Germany’s unemployment rate unexpectedly surged in May, at up 60,000 versus expectations for a decline of 8,000 workers. Germany is the economic workhorse of the European Union.

It’s summertime again and some European Union instability is due. This time, concerns are rising among Europeans as Italy and Greece are balking about conforming to EU rules on fiscal discipline. And the U.K. can’t seem to figure out how to leave the EU in a smooth fashion.

A feature in the markets this week is falling government bond yields, partly due to “flight-to-safety” buying amid keener risk avoidance among traders and investors. More and more market watchers are thinking the long bull run in equities has ended. Germany today sold a five-year debt instrument today at a record low yield of -0.56%. The U.S. Treasury yield curve today moved into an inverted state, whereby the closer maturities yield more than the longer maturities. That’s a historical warning signal for slowing economic growth or even recession.

The key “outside markets” today see the U.S. dollar index trading higher following good gains Tuesday, while Nymex crude oil prices are lower, hit a 2.5-month low and are trading just above $58.00 a barrel.

Technically, August gold futures prices closed near mid-range today. The bears have the overall near-term technical advantage. Prices are in a three-month-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 $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,273.20. First resistance is seen at this week’s high of $1,292.60 and then at $1,300.00. First support is seen at $1,280.00 and then at $1,273.20. Wyckoff's Market Rating: 4.0

July silver futures prices closed nearer the session high on short covering after hitting a six-month low on Tuesday. The silver bears have the solid overall near-term technical advantage. A three-month-old downtrend is in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at $14.50 and then at last week’s high of $14.635. Next support is seen at this week’s low of $14.265 and then at $14.175. Wyckoff's Market Rating: 1.5.

July N.Y. copper closed down 305 points at 266.55 cents today. Prices closed nearer the session low today and closed at a more-than-four-month low close. The copper bears have the firm overall near-term technical advantage. Prices are in a steep six-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 280.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 256.10 cents. First resistance is seen at today’s high of 269.80 cents and then at this week’s high of 271.80 cents. First support is seen at last week’s low of 265.45 cents and then at 262.50 cents. Wyckoff's Market Rating: 2.5.