(Kitco News) – Gold and silver prices are significantly higher and near daily highs during the US midday trading Thursday. The bullish external market forces on that day are fueling the metals gains as the US dollar index is significantly lower and crude oil prices are higher. Precious metals bulls also view Wednesday afternoon’s FOMC results as favorable for the market. August gold futures were up $ 32.20 to $ 1,831.90 and September Comex silver was up $ 0.943 to $ 25.82 an ounce.
Traders and investors were still digesting Wednesday afternoon’s conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting, including a press conference by Fed Chairman Jay Powell. After initially thinking the Fed was less accommodating, in the aftermath of the FOMC statement, Powell’s press conference appeared to lead the market to think that if the Fed could start scaling back its bond buying program (quantitative easing) as soon as this year, due to a strengthening US economy, the central bank will not be in a hurry to reverse its broadly accommodative monetary policies. This rally in gold and silver prices after some initial hesitation in the aftermath of the FOMC statement, put pressure on the US dollar index and kept yields on US Treasury bonds nearly stable late Wednesday. of the day.
The latest reading on US gross domestic product fell short of 6.5% annual growth in the second quarter. Second quarter GDP grew 8.4%. The closely watched PCE price index of GDP data posted an increase of 6.4% higher than expected. The PCE was seen up 3.7% year over year. The PCE number falls into the camp of those looking for higher price inflation in the months to come, or more. The GDP data was also favorable to the metals markets.
The World Gold Council said global demand for gold has yet to recover from the pandemic. The WGC said demand for gold in the first half of 2021 was the lowest since 2008. The period from April to June saw global demand for gold at 955.1 metric tons (MT), a reduction compared to 960.5 MT during the same period in 2020. The second quarter of 2019 saw a demand of 1,132.1 MT. However, central banks bought more gold between April and June 2021 than any quarter in two years. ETFs also added considerable amounts of gold to their stocks in the second quarter of this year, the WGC said.
The yield on the 10-year US Treasury bill is currently 1.27%.
Technically, buyers of gold futures have regained the overall short-term technical advantage. The Bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,850.00. The bears’ next short term bearish price target is pushing futures prices below the strong technical support at $ 1,800.00. First resistance is seen at the July high of $ 1,835.00 and then at $ 1,850.00. The first support is seen at $ 1,815.00 and then $ 1,800.00. Wyckoff Market Rating: 6.0.
Silver bears always have the overall technical advantage in the short term. Prices are still in a 2.5 month downtrend on the daily bar chart. However, the Silver Bulls now have momentum on their side. The next bullish price target for Silver Bulls is to close September futures prices above strong technical resistance at the July high of $ 26.91 an ounce. The next bearish price target for bears is to close prices below solid support at this week’s low of $ 24.515. The first resistance is seen at $ 26.00 and then at $ 26.25. The next support is seen at $ 25.50 and then at $ 25.25. Wyckoff Market Rating: 3.5.
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