Gold sees mild downside correction following recent gains

(Kitco News, Mon. Aug 16th, 2021 ) – Gold prices are modestly down in early U.S. trading Monday, on a routine corrective pullback following recent good gains. The bulls still have some momentum on their side. A bit more anxiety in the marketplace this week may also support the precious metals markets, on some safe-haven demand. October gold futures were last down $3.50 at $1,772.50 and September Comex silver was last down $0.309 at $23.475 an ounce.

Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed to lower openings when the New York day session begins. The market place is uneasy to start the trading week, amid a geopolitical flare-up. In stunningly rapid fashion, the Taliban has taken over Afghanistan following the recent U.S. military withdrawal from the country. Reports say there are still American citizens trapped in the country.

Meantime, the marketplace is also focusing on the prospect of the Federal Reserve tightening its monetary policy sooner than the central bank has heretofore suggested. Federal Reserve officials appear to be sounding that alarm in their comments. Some Fed watchers are now saying the tightening could come as early as this fall. The stronger-than-expected U.S. jobs report for July has helped stoke those ideas.

Weaker-than-expected economic data out of China Monday also has traders and investors edgy to start the trading week. China’s industrial production in July was up 6.4%, year on year, but the marketplace expected a rise of 7.8%. The surging delta variant of Covid-19 likely has crimped China’s economic growth and that has traders worried the same could happen to other major economies in the coming weeks/months.

The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil futures prices are lower and trading around $67.25 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.263%. The German 10-year bond (bund) is trading at minus 0.469% and the U.K. 10-year gilt at 0.563%.

U.S. economic data due for release Monday includes the Empire State manufacturing survey and Treasury international capital data.

1. Technically, October gold futures bears still have the slight overall near-term technical advantage but the bulls have momentum on their side now. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,676.40. First resistance is seen at the overnight high of $1,782.20 and then at $1,800.00. First support is seen at $1,760.00 and then at Friday’s low of $1,751.60.

The silver bears have the solid overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing September futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at this week’s low of $22.295. First resistance is seen at last Friday’s high of $23.83 and then at $24.00. Next support is seen at Friday’s low of $23.13 and then at $22.97

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com