Gold, silver see price gains on short covering

(Kitco News,  Mon. Aug. 21st, 2023) – Gold and silver prices are firmer in early U.S. trading Monday, with gold poking to another five-month low in overnight trading. Short covering, corrective rebounds are featured in the two precious metals. A weaker U.S. dollar index and firmer crude oil prices are bullish outside market elements for the metals markets. However, rising U.S. Treasury yields to start the trading week and still-bearish charts are limiting the upside for gold and silver. December gold was last up $4.40 at $1,920.90 and September silver was up $0.287 at $23.02.

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Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are pointed to higher openings when the New York day session begins.

In overnight news, the People’s Bank of China cut its one-year loan prime rate (LPR) by 10 basis points to a record low of 3.45%, while unexpectedly holding steady the five-year rate at 4.2%. Most economists had predicted a 15 basis-point cut. Monday’s move came after a surprising reduction in both short-term loan rates and the medium-term rate by the central bank last week, as it seeks to strike a balance between helping the economy and stemming further depreciation of the Chinese yuan. The Hang Seng stock index declined, headed for its lowest close since November. Reads a Wall Street Journal headline today: “China’s 40-year boom is over, raising fears of extended slump.”

The key outside markets today see the U.S. dollar index slightly lower, while Nymex crude oil futures prices are higher and trading around $82.00 a barrel. The benchmark U.S. Treasury 10-year note is presently fetching 4.304%.

There is no major U.S. economic data due for release Monday. Trades and investors are looking ahead to the late-week annual Federal Reserve symposium held in Jackson Hole, Wyoming. This meeting usually produces some market-sensitive news from world central bankers’ comments, including Fed Chair Jerome Powell. Powell is scheduled to speak at the confab on Friday.

Technically, the gold futures bears have the firm overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $1,980.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,933.50 and then at $1,938.20. First support is seen at the overnight low of $1,913.60 and then at $1,900.00.

Gold Price in US Dollars

The silver bears have the overall near-term technical advantage. Prices are trending lower on the daily bar chart. Silver bulls’ next upside price objective is closing September futures prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at last week’s high of $23.07 and then at $23.255. Next support is seen at the overnight low of $22.71 and then at $22.50

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com