Gold price weaker amid firmer greenback
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(Kitco News) - Gold and silver prices are lower in early U.S. trading Tuesday and feeling the pressure of a firmer U.S. dollar index on this day. Recently rising U.S. Treasury yields and a still-hawkish U.S. Federal Reserve are also negatives for the two precious metals markets. August gold was last down $8.40 at $1,962.80 and July silver was down $0.251 at $23.875.
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The S&P 500 and Nasdaq stock indexes are not far below last week's 10-month highs.
In overnight news, China again slightly eased its monetary policy by lowering two key lending rates by 10 basis points. The rate reductions were deemed by China watchers as less than expected.
U.S. Secretary of State Anthony Blinken met on Monday with Chinese President Xi Jinping and said they agreed to "stabilize" badly deteriorated U.S.-China ties, but the U.S.'s top diplomat left Beijing without an agreement on better military communications between the U.S. and China forces. The meeting was the highest-level U.S. visit to China in five years.
Fed Chair Jerome Powell will provide his semi-annual monetary policy report to Congress on Wednesday and Thursday. Powell is widely expected to repeat comments from his post-Fed meeting press conference, which had a hint of caution but still opened the door to higher rates down the road. The marketplace will be closely watching the testimony for any fresh clues on the timing of the rate increases. Should Powell strike a hawkish note, this could boost the U.S. dollar and U.S. Treasury yields. But if he is more downbeat and fails to provide fresh clues, this may weaken the greenback and lower yields. Speeches from Federal Reserve Bank of St. Louis President James Bullard and New York President John Williams today will be closely monitored.
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are near steady and trading around $71.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching around 3.779%.
U.S. economic due for release Tuesday includes new residential construction.
Technically, the gold futures bulls have the slight overall near-term technical advantage. However, the bears have re-established a price downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close in August 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 the overnight high of $1,971.80 and then at $1,987.80. First support is seen at the overnight low of $1,955.90 and then at $1,950.00. Wyckoff's Market Rating: 5.5
The silver bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at the June high of $24.62. The next downside price objective for the bears is closing prices below solid support at the May low of $22.785. First resistance is seen at the overnight high of $24.26 and then at the June high of $24.62. Next support is seen at $23.50 and then at $23.27. Wyckoff's Market Rating: 6.0.
Source: Kitco NEWS
