Prices gains for gold, silver as traders await Powell, round 2

(Kitco News, Wed. July 10th, 2024) – Gold and silver prices are posting good gains in early U.S. trading Wednesday, just ahead of the second appearance this week of Federal Reserve Chairman Jerome Powell before the U.S. Congress. August gold was last up $18.80 at $2,386.70. September silver was up $0.299 at $31.355.

Today for Powell it’s reporting the nation’s economic health to a House of Representatives panel. Powell told a Senate committee Tuesday the U.S. jobs market has “cooled considerably,” which further fueled speculation the Fed will cut interest rates later this year. Markets are expecting the first rate cut to come in September. Generally, the marketplace deemed Powell’s remarks on Tuesday as containing no new hawkish surprises. It’s doubtful Powell will deliver any surprises in his comments today.

Meanwhile, U.S. Treasury Secretary Janet Yellen Tuesday echoed Powell’s
remarks by saying the U.S. labor market is no longer driving inflation in the U.S. Traders and investors are now awaiting the June U.S. consumer price index on Thursday and the June producer price index on Friday.

Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward steady to firmer openings and at or near record highs for the S&P 500 and Nasdaq when the New York day session begins. In overnight news, China’s consumer price index rose just 0.2% in June, year-on-year, which was less than the expected rise of 0.4%. Food prices were down 2.1% in the same period.

A Dow Jones Newswires report today is headlined, “Central banks expected to keep hungrily adding to gold reserves.” The story said Citi analysts expect a record of around 1,100 metric tons of gold will be purchased by central banks this year. That would be up around 6% from last year.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are a bit weaker and trading around $81.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.282%.

U.S. economic reports out Wednesday include the MBA mortgage applications
survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.

Technically, August gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the June high of $2,406.70. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at $2,400.00 and then at $2,406.70. First support is seen at the overnight low of $2,369.70 and then at this week’s low of $2,356.00.

September silver futures bulls have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the May high of $33.05. The next downside price objective for the bears is closing prices below solid support at the June low of $28.90. First resistance is seen at last week’s high of $31.79 and then at $32.00. Next support is seen at this week’s low of $30.71 and then at $30.45.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail. com