(Kitco News) – Gold and silver prices were lower on Monday in the first transactions in the United States, with gold hitting a more than four-month low at $ 1,676.40, contracts at October base term and silver collapsing to more than eight-month low of $ 22.295, September futures base. However, prices are trading well below their daily lows as the market appears to have stabilized, at least for now. August gold futures fell $ 15.50 to $ 1,745.00 and September Comex silver fell $ 0.346 to $ 23.98 an ounce.
Metals are still feeling the fallout from last Friday’s surprisingly strong U.S. jobs report that pushed U.S. stock indexes to or near their all-time highs, rallied the U.S. dollar index, pushed returns in the U.S. US Treasury rising (price falling) – all bearish items for metals. Gold and Silver quickly recovered from their overnight “flash crash” lows and are trading near session highs, but still lower on this day. Jobs data on Friday immediately sparked heightened speculation that the Federal Reserve would act sooner to ease monetary policies. This really scared the bulls in the metals markets. Apparently, metals traders today are choosing not to focus on the upward inflationary implications of the rebound in the US economy which is already seeing consumer and producer prices rise.
The overnight gold and silver price flash crash can also be due to difficult trading conditions overnight amid the summer slump. Many traders are on vacation and much of Europe is on vacation in August. Many times the “big boys” like investment banks will make very large trades under low volume futures trading conditions, in order to get their money’s worth, and maybe that is what is happening. happened overnight.
Global stock markets were mixed overnight. US stock indices are pointed towards lower openings when the New York day session begins.
The focal point to start the negotiating week is the burgeoning new strain of Covid which is once again forcing major economies to assess measures to contain the spread of the virus. China and other parts of Asia are particularly affected. The Delta surge in tension, if not contained quickly, could put the brakes on any idea of the Federal Reserve to act sooner to scale back its bond buying program (quantitative easing).
The massive U.S. infrastructure spending plan that looks set to pass Congress and become law eased Covid concerns in the market somewhat earlier this week.
Major foreign markets today see the US dollar index almost stable and peak overnight for two weeks. Nymex crude oil futures prices are down sharply amid heightened Covid concerns and are trading around $ 65.65 per barrel. The bulls in the commodities market are keeping a close watch on crude oil, knowing that if the industry-leading crude continues to fall, other commodity markets should be pulled down as well.
US economic data due for release Monday is light and includes the Employment Trends Index.
Technically, bears on gold futures have gained the overall short-term technical advantage amid the recent sharp decline in prices. The Bulls’ next bullish price target is to produce a close above the solid resistance at $ 1,800.00. The bears’ next short-term bearish price target is pushing futures prices below strong technical support to the low of today’s high of $ 1,676.40. First resistance is seen at $ 1,750.00 and then to the overnight high of $ 1,763.00. The first support is seen at $ 1,725.00 and then $ 1,700.00. Wyckoff Market Score: 3.5
Silver bears have the overall short-term technical advantage. Prices are in a 2.5 month downtrend on the daily bar chart. The next bullish price target for Silver Bulls is to close September futures prices above strong technical resistance at $ 25.00 an ounce. The next bearish price target for bears is to close prices below solid support at the overnight low of $ 22.295. First resistance is seen at the overnight high of $ 24.38 and then at $ 24.75. The next support is seen at $ 23.50 and then $ 23.00. Wyckoff Market Rating: 2.5.
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