Quieter day in marketplace prompts profit taking in gold

August 28, 2019

New York (Aug 28)  Gold prices are moderately lower in midday U.S. trading Wednesday, on some normal profit taking by the shorter-term futures traders. Meantime, the silver market is higher and hit a more-than-two-year high overnight. Both metals continue to see underlying support on worries about slowing global economic growth amid falling government bond yields that are encouraging traders and investors to seek out safe-haven precious metals. December gold futures were last down $4.70 an ounce at 1,547.10. December Comex silver prices were last up $0.127 at $18.425 an ounce.

There were no major news developments to move markets today. However, there are storm clouds on the marketplace horizon, including the lingering U.S.-China trade war, Brexit concerns, and weakening global economic growth.

The U.S. Treasury yield curve remains partially inverted at mid-week, as the 2-year note yield is above that of the 10-year note. The inversion is a sometimes harbinger of impending U.S. economic recession. The inverted curve is bullish for the safe-haven metals, if even for the fact that it’s psychologically scary for traders and investors.

The key “outside markets” today see Nymex crude oil prices up and trading around $55.75 a barrel. The U.S. dollar index is firmer.

Technically, December gold futures prices closed near mid-range today on profit taking. Prices Monday hit a 6.5-year high. The bulls have the strong overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. There are no significant, early chart clues to suggest a market top is close at hand. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,600.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,500.00.


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