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Gold Pops As Fed’s Powell Leans Easy

Date: 10/07/2019

Jim Wyckoff Wednesday July 10, 2019 13:19

Kitco News

(Kitco News) – Gold prices are solidly higher and nearer daily highs in midday U.S. trading Wednesday. The precious metals were boosted today by comments from Federal Reserve Chairman Jerome Powell to the U.S. House of Representatives. Powell cited several concerns regarding the U.S. economy that traders deemed dovish on monetary policy. August gold futures were last up $13.20 an ounce at 1,413.70. September Comex silver prices were last up $0.088 at $15.235 an ounce.

Powell said that since the June FOMC meeting uncertainties, including world trade tensions, global growth and very low inflation, continue to cloud the outlook for the U.S. economy and these matters are not improving. He said the U.S. economic outlook is solid, but the prospects for other major world economies are worrisome enough to possibly warrant a U.S. rate cut. The marketplace is reading his remarks as fully dovish on U.S. monetary policy, which in turn strongly suggests the Fed will cut U.S. interest rates sooner rather than later, and possibly later this month. That’s a bullish scenario of the precious metals markets.

Further supporting the metals today is losses in the U.S. dollar index in the wake of Powell’s dovish remarks to the House panel. The other key “outside market” today sees Nymex crude oil prices solidly higher and trading around $60.00 a barrel. The rally in oil prices is also positive for the metals markets.

Technically, August gold futures prices closed nearer the session high today. The bulls have the overall near-term technical advantage, gained some more power today, and are keeping a five-week-old uptrend in place on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,428.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the July low of $1,384.70. First resistance is seen at today’s high of $1,415.30 and then at $1,420.00. First support is seen at $1,400.00 and then at today’s low of $1,391.80. Wyckoff’s Market Rating: 7.0.

September silver futures prices closed nearer the session high today. The silver bulls have regained the overall near-term technical advantage and are working on restarting the near-term price uptrend. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the June high of $15.625 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.70. First resistance is seen at today’s high of $15.315 and then at $15.51. Next support is seen at $15.00 and then at the July low of $14.915. Wyckoff’s Market Rating: 5.5.

September N.Y. copper closed up 685 points at 269.35 cents today. Prices closed near the session high on short covering today. The copper bears still have the overall near-term technical advantage. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the July high of 275.70 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 270.00 cents and then at 272.50 cents. First support is seen at 265.00 cents and then at today’s low of 262.50 cents. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff