Gold, silver prices up as risk aversion also rising

(Kitco News) Gold and silver prices are higher in early U.S. trading Monday, with silver notching a nearly four-year high just above $20.00. There has been a steady flow of safe-haven and chart-based buying in the two precious metals recently. August gold futures were last up $7.10 an ounce at $1,817.20. September Comex silver prices were last up $0.271 at $20.04 an ounce. 

Global stock markets were mixed in overnight trading. China’s mainland stock market rallied as that country’s economy is shifting into a higher gear from it’s late-winter lockdown. The U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. The debate in the U.S. is intensifying on whether to roll back the opening of businesses in some states that are experiencing a spike in Covid-19 cases and as public schools are set to reopening in a few weeks. More than 140,000 Americans have died from the virus. This week, the $600 government unemployment checks many American workers were getting expires, unless Congress extends the benefits. The U.S. Congress returns to work this week and will debate another round of stimulus measures for American workers. Attention of the marketplace is also on a contentious meeting of European Union officials regarding a Covid-19 economic recovery plan. The officials have been meeting since Friday to hammer out a plan but have yet to do so. All of the above have taken risk appetite out of much of the marketplace.

The important outside markets today see Nymex crude oil prices weaker and trading around $40.25 a barrel. The U.S. dollar index is weaker in early trading. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.61% level. 

There is no major U.S. economic data due for release Monday. 

Technically, the gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,779.20. First resistance is seen at last week’s high of $1,819.50 and then at $1,825.50. First support is seen at the overnight low of $1,806.60 and then at $1,800.00. Wyckoff's Market Rating: 8.5

September silver futures bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $18.50. First resistance is seen at the overnight high of $20.105 and then at $20.25. Next support is seen at the overnight low of $19.655 and then at $19.50. Wyckoff's Market Rating: 8.5. 

By Jim Wyckoff

For Kitco News

 jwyckoff@kitco.com

www.kitco.com