Gold, silver weaker on more weak China data, technical selling
Gold and silver prices are down in midday U.S. trading Wednesday, with both metals dropping to four-week lows. The precious metals are pressured by another economic report out of China that suggests less consumer demand for goods and services, which includes metals. Chart-based selling is also featured at mid-week, as the near-term technical postures for gold and silver have turned more bearish. December gold was last down $7.80 at $1,952.10 and September silver was down $0.057 at $22.75.
There was more downbeat economic data coming out of China today. The second-largest global economy has slipped into deflation territory for the first time in two years, due to weaker consumer demand. Chinese consumer prices fell 0.3% in July, year-on-year. The reading was in line with market expectations.
Asian and European stock markets were mixed to firmer in overnight trading. U.S. stock indexes are weaker near midday.
Key U.S. inflation reports this week are also in focus for the marketplace. The July U.S. consumer price index it out Thursday and the producer price index is out Friday. Both the CPI and PPI are expected to uptick just a bit from the June reports.
'If you are going to take big risks, it has to be for big rewards' – Rick Rule on resource investing
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are higher and trading around $84.00 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 4.182%.
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Technically, December gold futures prices hit a four-week low today. Bears have the overall near-term technical advangtage. Prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,939.20. First resistance is seen at today’s high of $1,966.10 and then at Tuesday’s high of $1,972.80. First support is seen at $1,950.00 and then at $1,939.20. Wyckoff's Market Rating: 4.0.
September silver futures prices also hit a four-week low today. The silver bears have the overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the June low of $22.34. First resistance is seen at $23.00 and then at Tuesday’s high of $23.255. Next support is seen at $22.50 and then at $22.34. Wyckoff's Market Rating: 4.0.
September N.Y. copper closed up 250 points at 379.15 cents today. Prices closed near mid-range. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the July high of 402.40 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 356.50 cents. First resistance is seen Tuesday high of 384.20 cents and then at this week’s high of 387.70 cents. First support is seen at today’s low of 376.45 cents and then at this week’s low of 372.65 cents. Wyckoff's Market Rating: 4.0.
By
Jim Wyckoff
For Kitco News
Tim Moseley