Gold, silver weaker but bulls may escape a rough week unharmed

Gold, silver weaker but bulls may escape a rough week unharmed

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Gold and silver futures markets are lower in early U.S. trading Friday. However, late this week prices have stabilized following Tuesday’s big losses that rattled the bulls. If gold and silver markets do not see significantly stronger losses at the close Friday than are seen presently, then bulls will escape a rough week with no major chart damage inflicted. October gold futures were last down $12.80 an ounce at $1,949.10. September Comex silver prices were last down $0.918 at $26.80 an ounce.

Global stock markets were mixed in overnight, with European indexes mostly down and Asian bourses mostly up. The U.S. stock indexes are pointed toward lower openings when the New York day session begins. Risk appetite is still mostly upbeat to end the trading week, even though Covid-19 infections around the globe are worrisomely high and the U.S. Congress has stalled out on providing any further relief for Americans.

The U.S. economic data point of the day will be the retail sales report for July, which is expected to come in at up 2.3% from June, following a 7.5% rise seen in June.

Traders and investors will be closely watching the weekend meeting between U.S. and China trade officials, in which they will assess the “phase 1” trade deal reached in January. Many are wondering if the meeting will be cordial, given the harsh rhetoric exchanged between the world’s two largest economies in recent months.

In overnight news, the Euro zone second-quarter GDP came in at down 12.1% from the first quarter and down 15.0%, year-on-year. Those numbers were right in line with market expectations, but still dour by historical standards.

The important outside markets today see Nymex crude oil prices weaker and trading around $42.00 a barrel. The U.S. dollar index is slightly lower. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 0.69%.

Other U.S. economic data due for release Friday includes preliminary productivity and costs, manufacturing and trade inventories and sales, the University of Michigan consumer sentiment survey, and industrial production and capacity utilization.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the firm overall near-term technical advantage, but need to defend what is the latest “reaction low” in the still-existing price uptrend on the daily chart—this week’s low of $1,865.00. A drop below that level would negate the near-term price uptrend to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,865.00. First resistance is seen at Thursday’s high of $1,966.30 and then at $1,980.00. First support is seen at Thursday’s low of $1,914.90 and then at $1,900.00. Wyckoff’s Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the firm overall near-term technical advantage, but need to defend what is the latest “reaction low” in the still-existing price uptrend on the daily chart—this week’s low of $23.58. A drop below that level would negate the price uptrend to suggest a near-term market top is in place. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $30.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.58. First resistance is seen at today’s high of $27.885 and then at $28.00. Next support is seen at $26.00 and then at Thursday’s low of $25.355. Wyckoff’s Market Rating: 7.5.

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