Gold, Silver Rally As U.S. Stock Market Tumbles

(Kitco News) - Gold and silver prices are sharply up and near daily highs in midday U.S. trading Wednesday. Both metals were poised to finish the day session at new high closes for the year. Safe-haven demand continues to be featured for the two precious metals at mid-week, amid heightened concerns about slowing world economic growth. Geopolitics also remains close to the front burner of the marketplace, which is also supporting gold and silver. December gold futures were last up $17.70 an ounce at 1,531.80. September Comex silver prices were last up $0.30 at $17.285 an ounce.

Traders and investors are on edge, fearing slowing or even stagnant world economic growth. U.S. Treasury and world government bond yields continue to fall today. The three-month Treasury bill and two-year note yields are trading above that of the 10-year note, to produce a partially inverted yield curve. However, the yield on the 30-year bond is still above that of the 10-year note. Still, the falling government bond yields, globally, paint a dim picture for the marketplace. The German bund hit another new record-low yield again Wednesday.

Germany’s gross domestic product contracted by 0.1% in the second quarter from the first quarter and was up a paltry 0.4% year-on-year, it was reported Wednesday. Meantime, the Euro zone GDP growth was 0.2% in the second quarter from the first quarter, and up 1.1%, year-on-year. Those numbers were in line with expectations.

There was also more downbeat economic data coming out of China today.

The civil unrest in Hong Kong remains in focus among traders and investors worldwide. The Hong Kong airport has fully reopened Wednesday, but protestors are still there. President Trump said Tuesday that U.S. intelligence shows Chinese troops have moved to the border with Hong Kong.

Technically, December gold futures prices closed near the session high and closed at a new high for the year after hitting a six-year intra-day high on Tuesday. The bulls have the strong overall near-term technical advantage and regained momentum today. A 10-week-old uptrend is in place on the daily bar chart. There are still no significant, early chart clues to suggest a market top is close at hand. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,550.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of $1,488.90. First resistance is seen at this week’s high of $1,546.10 and then at $1,550.00. First support is seen at $1,520.00 and then at $1,510.00. Wyckoff's Market Rating: 8.5

September silver futures prices closed near the session high today and closed at a new high for the year, after hitting a 1.5-year intra-day high Tuesday. The silver bulls have the solid overall near-term technical advantage and regained upside momentum today. An 11-week-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $16.51. First resistance is seen at this week’s high of $17.49 and then at $17.75. Next support is seen at $17.00 and then at $16.685. Wyckoff's Market Rating: 8.0.

September N.Y. copper closed down 355 points at 259.45 cents today. Prices closed nearer the session low. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at this week’s high of 263.80 cents and then at 265.00 cents. First support is seen this week’s low of 256.70 cents and then at the August low of 253.15 cents. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff

For Kitco News

 jwyckoff@kitc