By Jim Wyckoff of Kitco News www.kitco.com
Comex gold futures prices are trading near unchanged and have traded both sides of unchanged in subdued Monday morning dealings. The market is pausing and consolidating recent price action that last week produced a fresh all-time record high of $1,266.50 an ounce, basis August futures. August Comex gold last traded up $0.20 an ounce at $1,256.40. Spot gold was last quoted down $1.00 at $1,255.00.
The weekend Group of 20 meeting in Toronto, Canada produced no significant, market-moving news. The rhetoric regarding reducing deficits and implementing financial market regulation was expected by the market. The G-20 meeting also had no specifics on addressing the still very serious problem of the European Union's sovereign debt. That situation will continue to limit any selling interest in gold in the coming weeks. Investors have been buying gold on a safe-haven basis, with many focusing on buying gold as a hedge against any further weakening of the European currencies.
The U.S. dollar index is slightly higher, the Euro currency slightly lower and crude oil futures prices are trading weaker in early dealings Monday morning. The U.S. stock indexes are trading slightly higher early. Traders are awaiting Friday morning's key U.S. jobs report, which should provide for some more active trading in its immediate aftermath.
Importantly, last week’s decline in U.S. Treasury bond and note yields to fresh multi-month or even multi-decade lows suggests traders and investors are moving to a posture of reducing risk appetite. The U.S. Treasury market price action recently hints that gold will remain well supported on any price dips and that a market top in gold is still pending.
The London A.M. gold fix was $1,256.00 versus the previous P.M. fixing of $1,254.00.
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Technically, gold's bullish posture continues to invite fresh buying interest. Gold futures bulls still have the solid overall near-term and longer-term technical advantage as prices hover just below the record high scored last week. August gold prices are still in a 4.5-month-old uptrend on the daily bar chart. A close in August gold below the last "reaction low" low on the daily bar chart, which is now last week's low of $1,225.20, would at least temporarily negate the aforementioned uptrend on the daily chart and would be one early technical clue that a near-term market top is in place, or at least a significant downside correction is at hand.
For August gold, shorter-term technical resistance is seen at the overnight high of $1,260.20 and then at the record high of $1,266.50. Buy stops likely reside just above those levels. Sell stops likely reside just below chart support at $1,250.00 and then at 1,240.00. Today's key near-term Fibonacci pivot level for August gold: $1,250.00.
Comex silver futures are trading near unchanged Monday morning. July silver last traded down 2.5 cents at $19.085 an ounce. Trading in silver has been choppy recently. However, silver bulls still have the overall near-term technical advantage as prices Friday saw a technically bullish weekly high close. The next near-term upside price objective for the market bulls is to push and close July Comex futures prices above solid chart resistance at last week’s high of $19.46 an ounce. The next downside price objective for the silver bears is to push and close July silver prices below the last “reaction low,” which is last week's low of $18.17.
July silver finds shorter-term technical resistance at the overnight high of $19.185 and then at $19.46. Buy stops likely reside just above those levels. Shorter-term technical support for July silver is located at $19.00 and then at $18.75. Sell stops are likely placed just below those levels. Today's key Fibonacci pivot level for July silver futures is located at $18.97.
