(Kitco News) – Gold prices are down and hit a two-week low in early U.S. trading Monday. Silver prices are sharply lower and hit a seven-week low overnight. The key “outside markets” are in a bearish daily posture for the precious metals to start the trading week, as the U.S. dollar index is higher and crude oil prices are lower. December Comex gold was last down $6.80 an ounce at $1,339.40. September Comex silver was last down $0.432 at $18.88 an ounce.
Nymex crude oil futures prices are lower today on profit taking and a corrective pullback after hitting a six-week high on Friday. Meantime, the U.S. dollar index is firmer on a corrective bounce after hitting a seven-week low last Thursday.
World stock markets were mixed overnight in quiet, late-summer trading. The “dog days” of summer are here. Many traders in the Western Hemisphere are on vacation. Markets could be quieter until after the U.S. Labor Day holiday in early September.
The highlight of this week will be the Federal Reserve’s annual symposium held in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday. Recent comments from Federal Reserve officials have been mixed, but the majority of their recent rhetoric has leaned toward the hawkish side of U.S. monetary policy. Fed Vice Chairman Stanely Fischer on Sunday gave a speech that was deemed hawkish. There are now increasing ideas in the marketplace that the Fed will raise interest rates yet this year. Such has put some upside pressure on the U.S. dollar index just recently.
U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.
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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, December gold futures bulls still have the overall near-term technical advantage but trading has been choppy and sideways. A six-week-old downtrend line is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the August high of $1,374.20. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at the July low of $1,318.50. First resistance is seen at the overnight high of $1,345.70 and then at $1,350.00. First support is seen at the August low of $1,335.30 and then at $1,325.00. Wyckoff’s Market Rating: 6.0
September silver bulls have lost their overall near-term technical advantage as prices hit a seven-week low overnight. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $20.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $18.00. First resistance is at $19.00 and then at today’s high of $19.25. Next support is seen at today’s low of $18.71 and then at $18.50. Wyckoff’s Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
