Gold Pushes Still Higher, But Needs A Rest

Gold Pushes Still Higher, But Needs A Rest

Date: 25/06/2019

Jim Wyckoff Tuesday June 25, 2019 12:41

Kitco News

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(Kitco News) – Gold prices are posting more good gains in midday U.S. trading Tuesday, and hit another six-year high of $1,442.90 in August futures. However, prices are down from daily highs and the bulls may be tired and ready for at least a pause, if not a decent downside correction. Gold is also now in a short-term overbought condition, technically, which also suggests means the market is due for a normal and healthy pullback. August gold futures were last up $16.10 an ounce at 1,433.90. July Comex silver prices were last up $0.083 at $15.455 an ounce.

Gold prices have been driven north by a bullish cocktail of safe-haven demand, a slumping U.S. dollar index, easy central bank monetary policies and bullish technicals.

Asian and European stock markets were mostly weaker overnight. U.S. stock indexes are slightly lower at midday. Many markets are in a pause mode, awaiting fresh news on the geopolitical front.

The U.S.-Iran tensions in the Persian Gulf region continue to simmer near the front burner. Iran’s leader on Tuesday made disparaging remarks toward the U.S. and President Trump. Meanwhile, Trump said Monday there will be major new sanctions put on Iran and called the country the world’s number-one sponsor of terrorism. Traders are wondering if Iran is itching for a military confrontation with the U.S. Trump appears unwilling to start a fight, but he also will not likely stand by idly while being provoked. This situation is likely to linger for quite a while and will likely get worse before it gets better.

Meantime, U.S. President Trump and Chinese President Xi are scheduled to meet in Japan at the G20 meetings late this week—possibly after all the markets are closed on Friday– and discuss their ongoing trade war. The outcome of that meeting is uncertain and could have huge implications for many markets, especially if an agreement is reached to end the trade war. Many reckon a final deal will not be announced this week, but instead the two countries will likely say they’ve made some progress and will keep talking.

The key “outside markets” today see Nymex crude oil prices firmer and trading around $58.00 a barrel. Meantime, the U.S. dollar index is slightly up on a corrective bounce after hitting a three-month low overnight.

Technically, August gold futures prices closed near mid-range. The bulls have the strong overall near-term technical advantage amid an accelerating four-week-old uptrend on the daily bar chart. However, the market is now short-term oversold and due for a corrective pullback very soon. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of $1,403.60. First resistance is seen at today’s high of $1,442.90 and then at $1,450.00. First support is seen at today’s low of $1,421.40 and then at $1,415.00. Wyckoff’s Market Rating: 9.0.

July silver futures prices closed nearer the session high today. The silver bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $15.73 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.75. First resistance is seen at last week’s high of $15.555 and then at $15.73. Next support is seen at $15.25 and then at $15.15. Wyckoff’s Market Rating: 6.0.

July N.Y. copper closed up 375 points at 274.30 cents today. Prices closed near the session high and hit a five-week high today. The copper bulls and bears are now back on a level overall near-term technical playing field. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 285.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the June low of 259.95 cents. First resistance is seen at today’s high of 274.75 cents and then at 277.50 cents. First support is seen at 272.00 cents and then at 270.00 cents. Wyckoff’s Market Rating: 5.0.

By Jim Wyckoff