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Gold Bulls “Buy The Dip” As Trump Brow-Beats Federal Reserve

Date: 11/06/2019

Jim Wyckoff Tuesday June 11, 2019 13:34

Kitco News

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(Kitco News) – Gold prices are modestly up in early-afternoon U.S. dealings Tuesday. Early selling pressure that was tied to keener trader/investor risk appetite this week gave way to some bargain hunting following recent losses in the yellow metal. A slightly lower U.S. dollar index today and U.S. stock indexes backing down a bit also worked in favor of the precious metals market bulls. August gold futures were last up $1.50 an ounce at $1,330.90. July Comex silver prices were last up $0.101 at $14.74 an ounce.

The gold market may have been somewhat supported today by President Trump brow-beating the Federal Reserve again. He tweeted today that the Fed does not “have a clue” regarding its monetary policy. While the Fed members say they don’t pay attention to Trump, most don’t believe them. Trump’s pressure on the Fed to ease monetary policy could help to prompt a U.S. interest rate decrease as soon as next week, or in July, when the FOMC meets. Remember the about-face the Fed did late last year when Trump admonished them on raising interest rates.

European and Asian stock indexes were mostly higher again overnight, led by solid gains in China shares. The Chinese government moved to further stimulate its economy by announcing major infrastructure projects. The move by China’s government is an effort to offset the negative economic effects of the ongoing trade war with the U.S.

The U.S. economic data point of the day is the producer price index report for May, came in at up 0.1% from April, which was expected. Very low inflation levels not only in the U.S. but most of the world are an element that could also allow the Federal Reserve to lower U.S. interest rates as soon as this summer.

The key “outside markets” today see Nymex crude oil prices near steady and trading around $53.30 a barrel. The U.S. dollar index is slightly down and is in a near-term price downtrend. There are chart clues the USDX has put in a near-term top.

Technically, August gold futures prices closed nearer the session high today. The bulls still have the overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,352.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,310.00. First resistance is seen at today’s high of $1,333.80 and then at this week’s high of $1,341.70. First support is seen at today’s low of $1,323.60 and then at $1,320.00. Wyckoff’s Market Rating: 6.5.

July silver futures prices closed nearer the session high today. The silver bears have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $15.15 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $14.265. First resistance is seen at $14.85 and then at $15.00. Next support is seen at this week’s low of $14.625 and then at last week’s low of $14.565. Wyckoff’s Market Rating: 3.0.

July N.Y. copper closed up 90 points at 267.05 cents today. Prices closed nearer the session low on tepid short covering after hitting a five-month low last week. The copper bears have the solid overall near-term technical advantage. Prices are in a steep seven-week-old downtrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 277.75 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 256.10 cents. First resistance is seen at today’s high of 270.20 cents and then at 272.50 cents. First support is seen at today’s low of 266.00 cents and then at this week’s low of 262.55 cents. Wyckoff’s Market Rating: 2.0.

By Jim Wyckoff