(Kitco News) – Gold and silver prices are modestly higher in early U.S. trading Tuesday. Some mild short covering in the futures markets and bargain hunting in the cash markets are featured, following recent selling pressure. December Comex gold was last up $1.40 an ounce at $1,344.90. December Comex silver was last up $0.132 at $19.13 an ounce.
World stock markets were mixed overnight. European equities were boosted by an upbeat Euro zone purchasing managers index (PMI). The Markit PMI reading was 53.3 in August from 53.2 in July. The Euro zone economy has proven resilient following the late-June Brexit vote that surprised many. Asian shares were mostly lower due in part to an appreciating Japanese yen. U.S. stock indexes are pointed toward higher openings when the New York day session begins.
World stock markets have been in a general rally mode in recent weeks, with many indexes hitting record or multi-year highs, or close to them, which is a negative for the competing asset, safe-haven gold.
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.
Nymex crude oil futures prices are lower again today on more profit taking by the short-term futures traders, following recent gains. It appears Nymex oil prices are stuck in a trading range between $40.00 and $50.00 a barrel.
Meantime, the other key outside market finds the U.S. dollar index weaker and hovering not far above last week’s seven-week low.
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. There are now increasing ideas in the marketplace that the Fed will raise interest rates yet this year.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the U.S. flash manufacturing PMI, new residential sales, and the Richmond Fed business survey.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
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 $1,350.00 and then at $1,360.00. First support is seen at the August low of $1,335.30 and then at $1,325.00. Wyckoff’s Market Rating: 6.0
December silver bulls and bears are on a level overall near-term technical playing field. Prices are in a three-week-old downtrend on the daily bar chart. 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 Monday’s high of $19.385 and then at $19.50. Next support is seen at today’s low of $18.975 and then at Monday’s low of $18.55. Wyckoff’s Market Rating: 5.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow @KitcoNewsNOW
