Gold prices are modestly lower in early U.S. trading Thursday, on a routine corrective pullback after pushing to a 7.5-year high of $1,796.10 Wednesday. Risk appetite is on the wane late this week and that’s bullish for the safe-haven metals. Don’t be surprised to see traders come in to buy the dip in prices. August gold futures were last down $7.40 an ounce at $1,767.40. July Comex silver prices were last down $0.15 at $17.52 an ounce.
Global stock markets were mixed to lower in overnight trading. U.S. stock indexes are pointed toward steady to weaker openings when the New York day session begins, following strong losses Wednesday. The Covid-19 pandemic appears to be spreading at a more alarming rate again in many countries, including the U.S. That has sapped trader and investor confidence late this week.
Many health experts are saying two months of progress in the U.S. has been thrown out the window because businesses opened up too early and Americans are not being vigilant enough because they got “Covid-fatigue.” It seems unlikely the U.S. will get locked down to the degree seen in the spring. Still, the worrisome rise in infections the past couple weeks could bring a halt to the rapid U.S. economic recovery seen since businesses started reopening. That is what has the U.S. stock indexes selling off.
Another concern for the marketplace is rumblings the U.S. could implement more trade tariffs against the European Union and the U.K. The U.S. and China (the world’s two largest economies) already have strained relations on trade and other matters.
There is also trader talk the marketplace is beginning to sense President Trump is in real danger of losing his re-election bid in November. A win by the Democrat, Joe Biden, would probably see corporate and wealthy American tax increases as well as more regulations on businesses—bearish for the stock market.
The important outside markets today see Nymex crude oil prices weaker and trading around $37.50 a barrel. The U.S. dollar index is higher early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.
It’s a busy day for U.S. economic data Thursday, including the weekly jobless claims report, the third estimate for first-quarter gross domestic product, the advance economic indicators report, durable goods orders and the Kansas City Fed manufacturing survey.
Technically, the gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at the overnight high of $1,779.60 and then at this week’s high of $1,796.10. First support is seen at the overnight low of $1,764.10 and then at this week’s low of $1,753.50. Wyckoff’s Market Rating: 8.0
July silver futures bulls have the overall near-term technical advantage but have faded a bit late this week. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $19.075 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at $17.75 and then at $18.00. Next support is seen at this week’s low of $17.425 and then at $17.25.