Comex gold futures prices are not straying too far from the unchanged mark in quieter dealings Wednesday. The gold market bears remain in near-term technical control. Comex August gold last traded up $0.50 at $1,377.50 an ounce. Spot gold was last quoted down $0.50 at $1,378.25. July Comex silver last traded up $0.089 at $21.735 an ounce.
European and Asian stock and financial markets were calmer Wednesday, following Tuesday’s keen “risk-off” trader mentality. Industrial production in the Euro zone rose by 0.4% in April from March, for the third straight monthly rise. This report supported ideas the Euro zone collective economy is on the mend, albeit slowly. Japan’s Nikkei stock index was down again Wednesday and is now off around 16% from its high scored last month. The markets in China were closed for a public holiday Wednesday.
A recent theme in the market place worldwide has been falling bond market prices (rising yields). A German bond auction Wednesday produced the highest yield since February. U.S. Treasury yields are also at multi-month highs. Another theme that has just developed recently is weakening periphery, or emerging market currencies. The Indian rupee, Thailand baht and Malaysian ringgit are all under serious selling pressure this week. The aforementioned developments could become bullish factors for the gold market in the coming days and weeks.
The U.S. dollar index is firmer Wednesday morning on some short covering. The greenback bears still have some downside near-term technical momentum. Nymex crude oil prices are near steady early Wednesday. Trading in oil remains choppy as the bulls and bears struggle for near-term control.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE energy stocks report, the monthly Treasury budget statement, and the World Bank’s global economic prospects report.
The London A.M. gold fixing is $1,377.25 versus the previous P.M. fixing of $1,374.25.
Technically, August gold futures bears have the overall near-term technical advantage and have gained some downside momentum this week. Prices are in an eight-month-old downtrend on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,423.30. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at the May low of $1,338.00. First resistance is seen at this week’s high of $1,387.70 and then at $1,400.00. First support is seen at this week’s low of $1,364.50 and then at $1,355.00.
July silver bears have the overall near-term technical advantage. Prices are in an overall eight-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $22.915 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $20.25. First resistance is seen at $22.00 and then at $22.50. Next support is seen at this week’s low of $21.33 and then at $21.00.
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