Gold, Silver See Price Weakness Amid Rallying Equities

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Aug 25, 2020 10:45 NY TimeKitco 10AM Silver Fix

Silver	26.44	-0.13
Platinum	921.00	+12.00
Palladium	2061.00	+2.00
Rhodium	9700.00	-300.00

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(Kitco News, Tues. Aug. 25th, 2020) – Gold and silver futures markets are  modestly lower in early U.S. trading Tuesday. Upbeat trader and investor attitudes that are propelling global stock markets higher are a negative for the safe-haven metals. Still, given that major U.S. stock indexes are setting record highs, gold and silver markets are showing keen resilience even if prices have backed off a bit. October gold futures were last down $6.50 an ounce at $1,925.00. September Comex silver prices were last down $0.027 at $26.58 an ounce.

Global stock markets were mostly higher overnight. The U.S. stock indexes are pointed toward solidly higher openings when the New York day session begins, including the S&P 500 and Nasdaq again at record highs. The marketplace breathed a sigh of relief on upbeat news regarding U.S.-China trade talks. Senior trade officials on both sides held a videoconference Monday and reaffirmed the commitment to a partial trade deal agreed upon in January.

A positive German IFO business climate index report on Tuesday helped to boost the European stock indexes and the Euro currency. The main IFO index rose to 92.6 in August from 90.4 in July and also beat market expectations.

While new Covid-19 cases in the U.S. continue to stymie the world’s largest economy as it tries to regain momentum from the springtime lockdowns, reports say China, the world’s second-largest economy, is making rapid progress on restoring conditions to normal. Most agree that China’s more rapid recovery than the U.S. is due to China’s very strict lockdown and quarantine measures it mandated on its citizens. Still, reports also say China is quietly buying U.S. and other global food products to make up a huge shortfall caused by major flooding, and crop and infrastructure damage, along the Yangtze river. Some traders wonder if this situation could help to jumpstart price inflation in the raw commodity sector.

Traders and investors are looking forward to two big events this week: the U.S. Republican national convention in which President Trump will accept his party’s nomination, and the annual Federal Reserve Symposium that has been traditionally held in Jackson Hole, Wyoming but this year will be virtual. Fed Chairman Jerome Powell is scheduled to speak late this week during the event.

The important outside markets today see Nymex crude oil prices near steady and trading around $42.65 a barrel. The hurricane in the Gulf of Mexico that is bearing down on the U.S. Gulf coast has pushed gasoline futures prices to a five-month high. The U.S. dollar index is lower and not far above its recent two-year low. The yield on the U.S. Treasury 10-year note rose to 6.8% Tuesday, in another sign of rising confidence in the marketplace.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the monthly house price index, the S&P-Case-Shiller home price index, the Richmond Fed business survey, the consumer confidence index, and new residential sales.

Technically, the gold bulls have the firm overall near-term technical advantage, amid recent normal downside price corrections in a market that is still solidly bullish. Prices are still in an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at Monday’s high of $1,961.90 and then at $1,975.00. First support is seen at last week’s low of $1,909.60 and then at $1,900.00.

September silver futures bulls have the solid overall near-term technical advantage. A bullish symmetrical triangle pattern has formed on the daily bar chart. Prices are still in an overall price uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the August high of $29.915 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $23.58. First resistance is seen at Monday’s high of $27.34 and then at $27.635. Next support is seen at last week’s low of $26.095 and then at $26.000

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com