Gold price sharply down as Russia approves Covid vaccine

London (Aug 11)  Gold and silver prices are sharply lower in early U.S. trading Tuesday, with the yellow metal falling back below $2,000. Traders and investors have put risk back on the table today, due in part to news overnight that Russia has approved a Covid-19 vaccine. Russian President Vladimir Putin told reporters the vaccine has been given to his daughter. However, global health experts are cautioning that the Russian vaccine is premature because it has not gone through full “stage three” trials that last a few months. Still, the marketplace is so far Tuesday morning taking the Russian news as very good. October gold futures were last down $51.70 an ounce at $1,978.60. September Comex silver prices were last down $1.486 at $27.785 an ounce.

A look at the daily charts for both gold and silver today still show prices are in normal downside corrections in still-strong uptrends. More strong selling pressure this week could produce near-term chart damage. Thus, price action in gold the rest of this week will be critical. Bulls still have the solid overall near-term technical advantage in both metals.

Global stock markets rallied in overnight trading and the U.S. stock indexes are also pointed toward higher openings when the New York day session begins. Besides the Russian Covid vaccine news, there are reports the U.S. Congress and President Trump may be inching closer to agreeing upon a new government stimulus package for Americans, and that’s also a positive for marketplace sentiment. Also, the new Covid-19 cases in the U.S. are starting to drop just a bit.

The important outside markets today see Nymex crude oil prices firmer and trading around $42.50 a barrel. The U.S. dollar index is down. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.6%.

U.S. economic data due for release Tuesday includes the NFIB small business index, the Goldman Sachs and Johnson Redbook retail sales reports, and the producer price index.

Technically, the gold bulls still have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at last week’s record high of $2,078.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $2,000.00 and then at today’s high of $2,031.00. First support is seen at the overnight low of $1,976.00 and then at $1,950.00.

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