Gold peaks at 7.5 years, falls back into normal profit taking

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(Kitco News) – Gold prices are moderately lower in the mid-day U.S. trade on Wednesday after hitting a 7.5-year high of $ 1,796.10 overnight, August futures, before retreating. Safe-haven demand has turned up in the yellow metal this week amid a worrying rise in Covid-19 infections worldwide. Importantly, technical charts for gold and silver remain completely bullish (especially gold), suggesting upside price potential for both metals in the near term. August gold futures lost $ 7.70 an ounce to $ 1,774.30. Comex silver prices in July fell $ 0.413 to $ 17.65 an ounce.

A solid decline in the U.S. stock market today appears to be negative for the precious metals markets, driving them lower from the highs overnight. European stock markets also fell in overnight trading, while Asian stocks were mixed. Investor and investor risk appetite is declining in the middle of the week. There is an intense debate over whether the increase in Covid infections will result in a renewed blockage of companies that would mean further harm to the recovering economies. There is also increasing talk in the market that the President of the United States, Trump, has a good chance of losing his seat this fall. Such would be interpreted as bearish for US stocks due to ideas of higher corporate taxes.

In other news on Tuesday, Germany’s Ifo trade sentiment index, closely watched, rose by a record amount in June, reaching 86.2 from 79.7 in May. “German companies see the light at the end of the tunnel,” the Ifo report said. This is just the latest data suggesting that the world’s major economies are recovering much faster than most economists expected.

In today’s major external markets, Nymex crude prices drop dramatically and are trading around $ 38.00 a barrel. The US dollar index has risen solidly today. These two markets were today bearish on the precious metals markets.

The yield on the benchmark 10-year U.S. Treasury note is currently around the 0.69% level. In perspective, the 10-year German government bond (the bund) is currently yielding -0.44%.

Technically, the August gold futures bulls still have the strong short-term overall technical advantage. Gold Bulls’ next near-term upside price objective is to produce a close above solid technical resistance at $ 1,800.00. Bears’ next near-term downside price target is pushing prices below solid technical support at this week’s low of $ 1,753.50. The first resistance is seen at $ 1,789.00 and then at today’s high of $ 1,796.10. First support is seen at today’s low of $ 1,770.60 and then at Tuesday’s low of $ 1,758.30. Wyckoff Market Rating: 8.0

July silver futures prices were closer to the session low at noon and obtained a bearish “foreign day” today. Silver bulls still have the strong short-term overall technical advantage. The next upside price objective for silver bulls is to close prices above solid technical resistance at the April high of $ 19,075 an ounce. The next downside price breakout target for bears is to close prices below solid support at $ 17.00. The first resistance is seen at $ 18.00 and then at the current high of $ 18,255. The next support is seen at today’s low of $ 17,425 and then at $ 17.25. Wyckoff Market Rating: 7.0.

New York July Copper closed 165 points at 264.25 cents today. Prices closed near the low session today. Copper bulls have a strong short-term overall technical advantage. Prices are on a three month uptrend on the daily bar chart. The next upside price objective for copper bulls is to push and close prices above solid technical resistance at the June high of 270.00 cents. The next downside price objective for the bears is to close prices below solid technical support at 250.00 cents. The first resistance is seen at the current high of 268.45 cents and then at 270.00 cents. First support is seen at Tuesday’s low of 261.95 cents and then at this week’s low of 259.50 cents. Wyckoff Market Rating: 6.5.