Gold and silver prices are again sharply higher in midday U.S. trading Wednesday. Gold prices have pushed to an almost nine-year high, while silver is strongly up again today and hit a 6.5-year high. The feature in the global marketplace at mid-week is the gold and silver markets. Gold is now not far below the record high of $1,920.70 scored in 2011, basis Comex futures. Safe-haven demand, technical buying, a weaker U.S. dollar index, rising crude oil prices, and increasing consumer demand from China and possibly India are all fueling the bull runs in the two precious metals markets. August gold futures were last up $20.90 an oz at $1,864.40. September Comex silver prices were last up $1.1403 at $22.96 an oz.
Veteran market participants know that looking at past price history helps in determining where prices are headed in the future. An examination of the monthly continuation charts for nearby gold and silver futures markets shows the next major top side target for gold is the all-time high of $1,920.70, scored in 2011. If that level is taken out, then the $2,000.00 mark would likely be challenged in short order.
For silver, the next top side price objective is longer-term chart resistance at $26.00. Importantly, while gold is near the highest of its historical trading range, silver is only in the middle of its historical trading range, basis Comex futures, dating back virtually 50 years ago. Such suggests there’s much more room to run on the upside for the silver market, as many traders reckon silver is presently undervalued compared to big brother gold.
Look for larger daily price moves for at least the near term. Remember, too, that even the strongest of bull market runs see significant downside price corrections in the uptrends. Keep reading my AM and PM reports for the early clues on gold and silver price trend accelerations or reversals.
Global stock markets were mostly lower in overnight trading. The U.S. stock indexes are mixed at midday. Traders and investors are more risk averse at mid-week.
China-U.S. relations continue to erode after the U.S. suddenly closed the Chinese consulate in Houston, Texas. China called the U.S. move an “unprecedented escalation” in U.S-China tensions.
President Trump has started doing Covid-19 briefings again and on Tuesday said the pandemic in the U.S. will “get worse before it gets better.” Trump also did an about-face by urging Americans to wear masks.
Hopes of another U.S. government financial aid package to Americans coming quickly have faded this week, amid disagreement among legislators on the package’s contents.
The important outside markets today see Nymex crude oil prices weaker and trading around $41.30 a barrel after touching a 4.5-month high on Tuesday. The U.S. dollar index is lower in early trading and near this week’s 4.5-month low. The yield on the benchmark U.S. Treasury 10-year note is presently around the 0.59% level.
U.S. economic data due for release Wednesday includes the weekly mba mortgage applications survey, the monthly house price index, existing home sales, and also the weekly DOE liquid energy stocks story.
Technically, August gold futures bulls have the strong overall near-term technical advantage, to suggest still a lot of upside in the near term. prices are in an accelerating six-week-old uptrend on the daily chart. Gold bulls’ next upside near-term price objective is to produce a close above technical resistance at the all-time high of $1,920.70. Bears’ next near-term downside price objective is pushing prices below solid technical support at $1,800.00. first resistance is seen at today’s high of $1,871.20 so at $1,900.00. First support is seen at today’s low of $1,842.10 and then at $1,829.80.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1,750.15.
The projected upper bound is: 1,908.76.
The projected lower bound is: 1,833.36.
The projected closing price is: 1,871.06.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 95.3375. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 76.40. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 10 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 208.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 2 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -3.474 at 1,868.280. Volume was 8,900% above average (trending) and Bollinger Bands were 9% narrower than normal.
Open High Low Close Volume 1,871.385 1,876.160 1,861.800 1,868.280 27,122
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1,822.24 1,758.50 1,616.22 Volatility: 13 14 20 Volume: 2,712 542 136
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAU= is currently 15.6% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.
Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 27 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.
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