Gold At 6-Mo. Low, But Metal Is Now Oversold

(Kitco News) - Gold prices are down and hit another six-month low in early-afternoon U.S. tradingThursday. However, prices have moved up from their daily lows. An appreciatingU.S. dollar on the foreign exchange market continues to squelch buying interestin the precious metals. However, the gold market is now short-term oversold anddue for a least a decent corrective upside bounce very soon, and perhaps asearly as Friday. August Comex gold futures were last down $3.60 an ounce at$1,270.80. July Comex silver was last up $0.011 at $16.32 an ounce.

Thespecter of a global trade war continues to dent trader and investor confidenceand is pressuring world stock and commodity markets. Gold and silver continueto act like the raw commodities they are, instead of safe-haven stores ofvalue.

Worriesabout rising interest rates are also a bearish element for gold and silvermarkets. As safe-haven assets, the metals pay no dividends, whereasinterest-bearing securities do.

Thekey “outside markets” today find the U.S. dollar index down a bit at middayafter hitting another 11-month high overnight. The strong greenback is a majorbearish weight on the raw commodity sector, along with the world trade worries.

Meantime,Nymex crude oil prices were near steady and trading around $65.70 a barrel. Oiltraders are looking ahead to the OPEC meeting that begins Friday in Vienna,Austria. Saudi Arabia and Russia are expected to announce they will increaseoil production. Falling oil prices are also negative for the raw commoditysector, given that oil is arguably the sector leader.

Technically,the gold bears have the firm overall near-term technical advantage. Anine-week-old downtrend is in place on the daily bar chart. Gold bulls' nextupside near-term price breakout objective is to produce a close above solidtechnical resistance at $1,300.00. Bears' next near-term downside pricebreakout objective is pushing prices below solid technical support at theDecember low of $1,251.90. First resistance is seen at $1,278.60 and then atthis week’s high of $1,286.80. First support is seen at today’s low of$1,262.40 and then at $1,251.90. Wyckoff's Market Rating: 3.0

Thesilver bears have the firm overall near-term technical advantage. Silver bulls'next upside price breakout objective is closing prices above solid technicalresistance at last week’s high of $17.35 an ounce. The next downside pricebreakout objective for the bears is closing prices below solid support at theMay low of $16.07. First resistance is seen at $16.50 and then at this week’shigh of $16.635. Next support is seen at today’s low of $16.19 and then at$16.07. Wyckoff's Market Rating: 3.0.

JulyN.Y. copper closed down 165 points at 302.40 cents today. Prices closed nearerthe session low. The copper bears have the overall near-term technicaladvantage amid the steep sell off recently. Copper bulls' next upside priceobjective is pushing and closing prices above solid technical resistance at320.00 cents. The next downside price objective for the bears is closing pricesbelow solid technical support at the March low of 295.85 cents. Firstresistance is seen at today’s high of 305.35 cents and then at 307.50 cents.First support is seen at 301.00 cents and then at 300.00 cents. Wyckoff'sMarket Rating: 3.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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