Gold Slightly Down; Geopolitics Limits Selling

Gold Slightly Down; Geopolitics Limits Selling

Kitco News , CONTRIBUTOR

(Kitco News) - Gold is slightly lower in early U.S. trading Monday, on some mild profit taking from the shorter-term futures traders after prices scored a six-week high overnight. Rising tensions with North Korea and Russia are keeping the gold sellers very timid to start the trading week. December Comex gold was last down $1.00 an ounce at $1,274.30. September Comex silver was last up $0.125 at $16.82 an ounce.

The weekend news that North Korea launched another ballistic test missile, which experts say could now reach well into the U.S. mainland, is not having a major impact on world markets. However, this matter could well be the next geopolitical flashpoint, as the U.S. says it will not allow North Korea to have such a capability.

Russia over the weekend announced it is expelling 750 U.S. diplomats in retaliation for U.S.-imposed sanctions on Russia. That news has no impact on markets, but underscores frayed relations between the two super powers.

In overnight news, China’s manufacturing purchasing managers’ index (PMI) came in at 51.4 in July. Forecasts called for a reading of 51.6. A number above 50.0 suggests expansion in the sector. The upbeat China data is an underlying positive for the precious metals markets. China is the world’s leading raw commodity importer.

The U.S. dollar index is higher in early U.S. trading, on corrective bounce from recent selling pressure. That’s somewhat limiting buying interest in the metals markets today. The dollar index hit a 13-month low last week. Meantime, the other “outside market” sees Nymex crude oil futures slightly lower on mild profit taking after the market hit a two-month high just above $50.00 a barrel overnight. Oil bulls still have upside technical momentum.

U.S. economic data due for release Monday includes the ISM Chicago business survey, pending home sales and the Texas manufacturing outlook survey. The key report of the week will be Friday’s U.S. jobs report for July from the Labor Department. The non-farm payrolls number of that report is expected to be up 180,000.

Gold Slightly Down; Geopolitics Limits Selling

Technically, December gold futures bulls have the firm overall near-term technical advantage amid a near-term price uptrend. Bulls’ next upside technical objective is pushing prices above chart resistance at the $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,249.40. First resistance is seen at today’s high of $1,277.30 and then at $1,280.00. First support is seen at $1,270.00 and then at $1,265.00. Wyckoff’s Market Rating: 6.5

September silver prices hit a two-month high overnight. Bulls and bears are on a level overall near-term technical playing field. However, silver prices have been trending higher for three weeks. The next upside price breakout objective is closing futures prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $17.00 and then at $17.25. Next support is seen at the overnight low of $16.665 and then at $16.50. Wyckoff's Market Rating: 5.0.