Gold Rallies As Markets Roiled On Trump China Tariff Announcement

(Kitco News) - Gold has taken back all of the steep losses seen over the past 24 hours on news that President Trump is going to slap an additional 10% tariff on Chinese imports into the U.S. Markets went wild on the news, with the stock market dropping sharply and U.S. Treasuries rallying strongly. December gold futures were last up $13.30 an ounce at 1,450.00. September Comex silver prices were last down $0.08 at $16.315 an ounce.

The Trump tariff announcement pressured the U.S. dollar index some more and prompted the U.S. stock market to lose all of its good daily gains and then drop solidly lower. The yield on the 10-year U.S. Treasury note dropped sharply to a 2019 low yield of 1.89%. Crude oil prices were pounded lower and were down over $4.00 a barrel as of this writing.

Up until the Trump news, traders and investors were still digesting Wednesday afternoon’s Federal Open Market Committee (FOMC) statement and Fed Chairman Powell press conference. While the FOMC cut its main interest rate, as expected, Powell took the marketplace aback when he said the Fed is not planning a long series of U.S. interest rate reductions. He added that this week’s interest rate cut was a “mid-cycle” adjustment. That spooked the metals markets. The U.S. dollar index rallied solidly to a new high for the year overnight.

Traders are now awaiting Friday morning’s U.S. employment situation report for July, arguably the most important monthly report for the U.S. economy. The key non-farm payrolls number is expected to be up around 165,000. In June, non-farm payrolls were up 224,000.

Technically, December gold futures prices closed near the session high after hitting a three-week low early on today. The bulls have the overall near-term technical advantage but faded and still need to show more power soon to restart a price 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 $1,467.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,400.00. First resistance is seen at $1,453.70 and then at $1,460.00. First support is seen at $1,440.00 and then at $1,430.00. Wyckoff's Market Rating: 7.5

September silver futures prices closed nearer the session high today. The silver bulls have the overall near-term technical advantage but faded badly this week. A two-month-old uptrend on the daily bar chart is now in jeopardy. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $16.685 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.625. First resistance is seen at $16.40 and then at $16.50. Next support is seen at $16.20 and then at 16.00. Wyckoff's Market Rating: 7.0.

September N.Y. copper closed steady at 266.65 cents today. Prices closed near the session high and hit another three-week low today. The copper bears have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the July 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 269.10 cents and then at 270.00 cents. First support is seen at today’s low of 264.35 cents and then at the July low of 261.20 cents. Wyckoff's Market Rating: 2.5.

By Jim Wyckoff