Gold and silver prices are slightly up in early U.S. trading Wednesday. While the geopolitical situation in the Middle East has significantly de-escalated at mid-week, there are still elevated worries and uncertainties regarding an uneasy Israel-Iran ceasefire. August gold was last up $7.00 at $3,340.90. July silver prices were last up $0.058 at $35.79.
Risk appetite is not robust at mid-week, but neither is risk aversion as a fragile Israel-Iran ceasefire appears to be holding. There are also now reports that the U.S. bombing of Iran’s nuclear facilities only set back Iran’s nuclear weapons program three to six months. The Trump administration denied those reports.
This week’s fluid geopolitical developments overshadowed a downbeat Conference Board U.S. consumer confidence reading for June—dropping to 93.0 from 98.4 in May. A Wall Street Journal survey expected the June reading to come in a 99.5. The forward-looking expectations index fell to 69.0 in June versus 73.6 in May. The Conference Board says a reading below 80 signals a U.S. recession. The June report suggests U.S. consumers remain very concerned about trade tariffs and their impacts on jobs, prices and inflation.
Said David Morrison of Trade Nation in a morning email dispatch: “It’s worth remembering that China-U.S. trade issues remain unresolved. Chinese Premier Li Qiang struck a cautionary tone overnight, urging global leaders not to let trade disputes become overly politicized. The remark underlined the fact that while the Israel-Iran hostilities and subsequent ceasefire have pulled the focus somewhat, other sources of tension continue to tick along under the surface, for now.”
Asian and European stocks were mixed to firmer overnight. U.S. stock indexes are pointed to narrowly mixed openings today in New York.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are slightly up and trading around $65.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.293%.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report. Fed Chair Powell today speaks to a Senate banking committee.
Technically, August gold futures bulls have the overall near-term technical advantage but are fading a bit. Bulls’ next upside price objective is to produce a close above solid resistance at the June high of
$3,476.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $3,300.00. First resistance is seen at Tuesday’s high of $3,385.00 and then at $3,400.00. First support is seen at this week’s low of $3,308.30 and then at $3,300.00. Wyckoff’s Market Rating: 6.5.
July silver futures bulls have the overall near-term technical advantage. However, a bearish broadening pattern has formed on the daily bar chart, which begins to suggest a market top is in place. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the June high of $37.405. The next downside price objective for the bears is closing prices below solid support at $35.00. First resistance is seen at $36.00 and then at $36.50.
Source: Jim Wyckoff Kitco
