Strong Greenback Dings Gold Bulls

(Kitco News) - Gold prices are modestly down in midday U.S. trading Monday, on some profit taking from the shorter-term futures traders and a normal pause and consolidation after prices last week hit a six-year high. A stronger greenback today is also a negative for the metals markets. Silver prices are higher and not far below the 13-month high scored last week. August gold futureswere last down $4.10 an ounce at 1,422.80. September Comex silver prices were last up $0.084 at $16.49 an ounce.

Traders and investors were in upbeat moods on Tuesday, which is also a negative for the safe-haven metals. Reports say President Trump met with U.S. technology companies Monday at the White House, regarding easing U.S. sanctions on China’s big communications firm, Huawei. This is being deemed a big positive on the U.S.-China trade front, suggesting the U.S. wants to move the negotiations forward. The trade news is actually a mixed bag for the metals, as the rally in competing asset class equities is bearish, but the specter of better demand for gold and silver coming from a healthier Chinese economy on a trade deal would be bullish for the metals.

Also slightly boosting world stock markets is news the U.S. Congress and the Trump administration have agreed on a government spending deal, to avoid a government shutdown anytime soon.

The marketplace so far this week is not seeing much lingering reaction to the weekend news Iran’s military seized a British oil tanker near the Strait of Hormuz, apparently in response to the U.K. capturing an Iranian vessel a couple weeks ago. Still, Iran’s confrontation with the U.S. and the U.K. sees a high probability of escalating in the coming weeks.

Just over the horizon: the European Central Bank holds its regular monetary policy meeting on Thursday. Next week, the U.S. Federal Reserve’s Open Market Committee (FOMC) has its money policy meeting. Both central banks are expected to ease their monetary policies at the meetings.

The key “outside markets” today see Nymex crude oil prices slightly weaker and trading around $56.15 a barrel. Meantime, the U.S. dollar index is solidly higher and hit a five-week high today. The USDX is now not far below this year’s high.  

Technically, August gold futures prices closed near mid-range today. The bulls still have the firm overall near-term technical advantage and are keeping in place a two-month-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,454.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the July low of $1,384.70. First resistance is seen at today’s high of $1,431.40 and then at $1,442.00. First support is seen at today’s low of $1,414.60 and then at $1,410.00. Wyckoff's Market Rating: 7.5

September silver futures prices closed nearer the session high and closed at a 12-month high close today. The silver bulls have the firm overall near-term technical advantage. Prices are in an accelerating seven-week-old uptrend on the daily bar chart. 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 $15.835. First resistance is seen at the July high of $16.625 and then at $16.75. Next support is seen at $16.25 and then at this week’s low of $16.195. Wyckoff's Market Rating: 7.5.

September N.Y. copper closed down 205 points at 270.10 cents today. Prices closed near the session low today on a pullback after hitting a nine-week high last Friday. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the last week’s high of 280.30 cents. The next downside price objective for the bears is closing prices below solid technical support at the June low of 259.95 cents. First resistance is seen at today’s high of 273.00 cents and then at this week’s high of 275.95 cents. First support is seen at today’s low of 268.75 cents and then at 265.00 cents. Wyckoff's Market Rating: 5.0.