Gold, silver see routine downside corrections Thursday

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Gold prices are moderately down in midday U.S. trading Thursday, with silver prices sharply lower. These are normal corrective price pullbacks in still-strong uptrends on the charts. Once again, look for bulls to soon step in to buy the dips and do some bargain hunting. August gold futures were last down $12.20 an ounce at $1,941.20. September Comex silver prices were last down $0.926 at $23.39 an ounce.

The marketplace Thursday morning got its first look at second-quarter U.S. gross domestic product and it was not at all pretty, coming in at down a stunning 32.9% from the first quarter. Analysts had forecast 1Q GDP to be down just shy of 35% from the first quarter. Today’s number is the worst quarterly GDP reading since it began being recorded in 1947, and beats the previous quarterly downturn by three-fold. Earlier today Germany released its 2Q GDP and it came in at -10.1% from 1Q and down 11.7%, year-on-year. Those numbers were the worst on record, dating back 50 years.

Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are mixed to lower at midday. Market participants were in a gloomier mood Thursday. The Covid-19 pandemic death toll in the U.S. has climbed above 150,000 and the anticipated “second wave” of infections appears to be a foregone conclusion at this point.

U.S. traders and investors also focused on some somber comments made by Fed Chairman Jerome Powell on Wednesday afternoon, at his press conference following the FOMC meeting that saw no change in U.S. monetary policy. “It looks like the data are pointing to a slowing pace of the recovery,” said Powell, citing evidence of a pullback by consumers and a slowdown in the rehiring of furloughed workers, particularly by small businesses. Today’s 12,000 rise in U.S. jobless claims from last week’s number corroborates a weakening of the economic recovery process.

U.S. stock indexes had been supported recently by corporate earnings reports that have generally beat market expectations.

Meantime, the U.S. Congress is nowhere close to agreeing on a new stimulus package for Americans, heading into their August recess.

The important outside markets today see Nymex crude oil prices lower, hitting a four-week low and trading around $40.25 a barrel. The U.S. dollar index is lower today after hitting a nearly two-year low on Wednesday. The yield on the benchmark U.S. Treasury 10-year note is currently trading around the 0.55% level.

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures bulls still have the strong overall near-term technical advantage, to suggest still more upside in the near term. Prices are in an accelerating seven-week-old uptrend on the daily bar chart. Gold bulls’ next upside near-term price objective is to produce a close above technical resistance at $2,000.00. Bears’ next near-term downside price objective is pushing prices below solid technical support at $1,850.00. First resistance is seen at today’s high of $1,965.10 and then at the record high of $1974.90. First support is seen at today’s low of $1,930.00 and then at $1,900.00. Wyckoff’s Market Rating: 9.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls still have the solid overall near-term technical advantage. Prices are in a 4.5-month-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at this week’s high of $26.275 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at today’s high of $24.58. Next support is seen at today’s low of $23.00 and then at this week’s low of $22.46. Wyckoff’s Market Rating: 8.0.

September N.Y. copper closed down 70 points at 291.25 cents today. Prices closed near mid-range today. The copper bulls have the solid overall near-term technical advantage. Prices are in a 4.5-month-old uptrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 275.00 cents. First resistance is seen at this week’s high of 294.35 cents and then at 297.00 cents. First support is seen at last week’s low of 286.65 cents and then at 284.50 cents.

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