Comex gold futures prices are moderately lower Monday morning as the key âoutside marketsâ are in a modestly bearish posture for the precious metals to start the new trading week: the U.S. dollar index is firmer and crude oil prices are weaker. Trading remains choppy and sideways on the daily chart. August gold last traded down $12.00 at $1,580.10 an ounce. Spot gold was last quoted down $9.30 an ounce at $1,580.50. September Comex silver last traded down $0.429 at $26.94 an ounce.
Itâs just a bit of a ârisk-offâ trading day in the market place in early trading Monday. In overnight news, Chinaâs chief central bank official said Chinaâs economic recovery is not yet stable and sluggish growth couldcontinue for a while. That is a bearish underlying factor for the precious metals markets, as well as other raw commodity markets.
Reports say the European Central Bank has recently shifted its stance on how to work to rescue troubled European banks. The ECB reportedly now wants to allow senior bank bond-holders to be the first to absorb losses. The ECB reports did push up Spanish and Italian bond yields Monday.
But the big news of the week for the market place will be Fed Chairman Bernankeâs speech before the U.S. Senate on Tuesday morning. Traders and investors will be closely scrutinizing Bernankeâs remarks for any fresh clues on easing of U.S. monetary policy forthcoming. Many believe the U.S. central bank will embark on another round of quantitative easing of monetary policy in the near futureâQE3. Most markets would likely react in a bearish way of the Fed offers no fresh hints on QE3 forthcoming.
The U.S. dollar index is higher in early trading. The greenback bulls still have upside near-term technical momentum. Meantime, Nymex crude oil futures prices are weaker early Monday. Trading in crude has turned choppy, but there are still some early clues the crude oil market has put in a bottom.
The London A.M. gold fix is $1,584.00 versus the previous London P.M. fixing of $1,595.50.
U.S. economic data due for release Monday includes the Empire State manufacturing survey, retail sales, manufacturing and trade inventories and sales, and the IMF world economic outlook.
Technically, August gold futures bulls and bears are still fighting for near-term technical control, with neither gaining much of an edge, as seen by the recent choppy and sideways trading range on the daily bar chart. Gold prices closed at a bullish weekly high close on Friday, but then sold off Monday morning. The gold bullsâ next upside price breakout objective is to produce a close above psychological resistance at $1,600.00. Bears\' next near-term downside price objective is closing prices below solid technical support at $1,547.60. First resistance is seen at the overnight high of $1,592.60 and then at last weekâs high of $1,596.50. First support is seen at $1,575.00 and then at Fridayâs low of $1,565.50.
September silver futures bears still have the overall near-term technical advantage as trading has been choppy recently. Prices are in a 4.5-month-old downtrend on the daily bar chart. Bullsâ next upside price breakout objective is closing prices above solid technical resistance at the July high of $28.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of $26.105. First resistance is seen at the overnight high of $27.425 and then at last weekâs high of $27.58. Next support is seen at $26.71 and then at $26.50.
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By Jim Wyckoff, contributing to Kitco News