Gold, silver see some normal profit taking from recent gains

(Kitco News) - Gold and silver prices are lower in midday U.S. trading Thursday, on some normal, and arguably healthy, profit taking and backing and filling on the charts following recent good gains. Gold early this week hit a 6.5-year high, while silver today notched a two-plus year high. December gold futures were last down $11.60 an ounce at 1,537.50. December Comex silver prices were last down $0.171 at $18.28 an ounce.

A strong rally in the U.S. stock market today, as well as a higher U.S. dollar index, helped to put some pressure on the precious metals on this day.

Risk appetite up-ticked today on news reports that Chinese government officials (from the Commerce Ministry) have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. This news coming from China may or may not corroborate President Trump’s assertion earlier this week that a high-level Chinese trade official contacted the U.S. to restart trade negotiations.

Still, there are enough concerns on the geopolitical front to keep the safe-haven metals supported, overall. Civil unrest in Hong Kong, the Brexit matter that will heat up this fall, and slowing global economic growth are all still front-burner issues for traders and investors.

A slightly weaker than expected U.S. gross domestic product report today landed in the camp of the precious metals market bulls and U.S. monetary policy doves. The second estimate of second-quarter GDP was up 2.0%, year-on-year, versus up 2.1% in the initial reading. However, the 2.0% print was right in line with market expectations.

The other key “outside market” today sees Nymex crude oil prices up and trading around $56.50 a barrel.

Technically, December gold futures prices closed near the session low today and scored a bearish “outside day” down on the daily bar chart. The bulls still have the solid overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,600.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,500.00. First resistance is seen at $1,546.10 and then at $1,550.00. First support is seen at $1,530.00 and then at $1,523.00. Wyckoff's Market Rating: 7.5.

December silver futures prices closed nearer the session low today. The silver bulls still have the strong overall near-term technical advantage. A three-month-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 $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $17.64. First resistance is seen at today’s high of $18.76 and then at $19.00. Next support is seen at Wednesday’s low of $18.17 and then at $18.00. Wyckoff's Market Rating: 8.0.

December N.Y. copper closed up 155 points at 258.00 cents today. Prices closed nearer the session high on short covering. Prices Monday hit a 2.5-year 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 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 240.00 cents. First resistance is seen at today’s high of 259.70 cents and then at 262.50 cents. First support is seen at today’s low of 255.30 cents and then at 253.20 cents. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff

For Kitco News

 jwyckoff@kitc