Gold Prices Hit 8.5-yr. High, Back Off on Profit Taking

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Kitco News – Watch NowBecause of the higher gold price, investor interest is growing across the sector says Joe Mazumdar, editor of Exploration Insights – by Kitco News, 10:42AM

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(Kitco News, Wed. July 1st, 2020) – Gold prices overnight hit another 8.5-year high but have slipped a bit in early U.S. trading Tuesday, on some more normal profit taking by the shorter-term futures traders. However, just like Tuesday, don’t be surprised to see bulls once again step in to buy the dip in a technically very strong market. August gold futures were last down $9.50 an ounce at $1,790.70. September Comex silverv prices were last down $0.052 at $18.585 an ounce.

The just released ADP national employment index report showed a rise of 2.369 million jobs in June, which was slightly below market expectations. Markets showed little reaction to the news.

Global stock markets were mixed to mostly up in overnight trading as the second half of 2020 gets under way. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins after posting the best quarterly performance in 20 years in the second quarter. While the U.S. stock indexes are still in lofty positions there remain storm clouds on the horizon. The Covid-19 pandemic has hit the U.S. harder than most other countries and continues to spread at an alarming rate. The top Trump administration infectious disease expert said the pandemic progress in the U.S. is “going in the wrong direction” and said new cases could hit 100,000 a day if U.S. citizens don’t use better prevention methods. The U.S. is now reporting about 40,000 cases a day.

In overnight news, the Euro zone June manufacturing purchasing managers index (PMI) came in at 47.4 versus 39.4 in May. A reading below 50.0 suggests contraction in the sector.

It’s a holiday-shortened U.S. trading week, as markets are closed Friday for the Independence Day holiday. However, the next two days will be very busy for U.S. economic data releases that are likely to move markets. Wednesday, sees the weekly MBA mortgage applications survey, the challenger job-cuts report, the ADP national employment report, the U.S. manufacturing PMI, the ISM manufacturing report on business, construction spending, the weekly DOE liquid energy stocks report, the global manufacturing PMI, domestic auto industry sales and the FOMC minutes from the last Fed meeting. The U.S. economic highlight of the week will be Thursday morning’s monthly jobs report from the Labor Department. In June, the key non-farm payrolls number is expected to be up 3.15 million, with the unemployment rate forecast at 12.4%. A slew of other important U.S. economic reports is also out on Thursday.

The important outside markets today see Nymex crude oil prices near steady and trading around $39.20 a barrel. The U.S. dollar index is slightly up early today. The yield on the benchmark U.S. Treasury 10-year note is currently around the 0.68% level.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,850.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $1,754.00. First resistance is seen at the overnight high of $1,807.70 and then at $1,825.00. First support is seen at $1,775.00 and then at $1,764.10.

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the February high of $19.125 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the June low of $17.175. First resistance is seen at the overnight high of $18.85 and then at $19.00. Next support is seen at the overnight low of $18.425 and then at $18.00

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com

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