More Selling Pressure on Gold Price Amid Bearish Charts and No Fresh News
New York (Jun 24) Gold prices are weaker and hit a nearly three-week low in early U.S. trading Wednesday. The overall technical posture of the yellow metal remains firmly bearish, and with a lack of major, markets-moving fundamental news this week, the chart-based sellers are in control. August Comex gold was last down $3.90 at $1,172.70 an ounce. July Comex silver was last up $0.063 at $15.80 an ounce.
The markets are focused on Greece this week, mainly because there is not much else happening on the world markets front. Greece and European Union officials are holding an emergency meeting in Brussels Wednesday to try to finalize a debt-restructuring and new funding deal. The two negotiating parties have come closer to agreement on a deal, but more tough hurdles need to be overcome, reports said. The Wall Street Journal said Wednesday its reporters have seen a document that points out “stark divisions” still exist between Greece and its creditors. Greece’s prime minister is again making negative comments on the matter, reports said. Greece’s present arrangement with its creditors expires on June 30—at which time Greece could run out of cash and be in default on its IMF/EU loans. A summit of EU leaders is scheduled for Thursday and Friday.
The market place earlier this week viewed the Greece debt talks as significantly improving, as evidenced by the increase in investor /trader risk appetite early this week. However, those notions are beginning to fade a bit at mid-week. European stock markets were lower Wednesday. U.S. stock indexes are slightly lower in pre-opening trading.
There was a downbeat economic report coming out of Germany Wednesday. The Ifo business confidence fell to 104.7 in June from 108.5 in May, and the lowest level since February. Worries about Greece are blamed on the decline in business confidence in Germany, which is the economic work horse of the European Union.
An interesting report from the Paris-based OECD think tank said that life insurance companies and pension funds are at risk of insolvency in the coming years due to very low interest rates and the massive quantitative easing of monetary policies by the major central banks of the world. The OECD said world interest rates are expected to remain low for years to come. The OECD report also said the instability of life insurers and pension funds could spill over into other sectors of world economies.
U.S. economic data due for release today includes the weekly MBA mortgage applications survey, the third estimate of the first-quarter GDP report, and the weekly DOE liquid energy stocks report.
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Wyckoff’s Daily Risk Rating: 5.5 (Trader and investor market risk appetite is just a bit keener at mid-week.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
The London A.M. gold fix is $1,175.75 versus the previous P.M. fix of $1,178.00.
Technically, August gold futures bears have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the June low of $1,162.10.