Gold prices are moderately higher in midday U.S. trading Thursday. August gold futures are poised to close at a five-month high close today. Silver bulls are on a tear this week as prices hit a nearly four-month high. August gold futures were last up $3.80 an ounce at 1,427.00. September Comex silver prices were last up $0.194 at $16.17 an ounce.
Silver prices have gained almost $1.00 this week on chart-based buying and perceived bargain hunting. Look for more upside in the metal in the near term, as this week’s advance in prices is getting the attention of the general investing public. The weekly chart for nearby Comex silver futures shows prices just this week have seen a push above a longer-term downtrend line drawn from the 2016 high. A push above the $16.20 longer-term chart resistance area, basis nearby silver futures, would provide the bulls with more technical fuel to push prices farther north, including a likely quick challenge of psychological resistance at the $17.00 level. Importantly, once the $16.20 level is cleared on the upside, the next longer-term chart resistance levels for silver are few and far between, suggesting big upside potential would be very possible. Keep in mind that less than 10 years ago, silver was sustaining price levels above $25.00 an ounce.
There are also declining expectations the U.S. and China can come to a trade agreement anytime soon, following recent downbeat rhetoric coming from both sides. Reports just out say China is demanding that the U.S. ease restrictions on its technology giant, Huawei. This situation has put a bit of a damper on global stock market bulls and is slightly supportive for safe-haven gold and silver.
The key “outside markets” today see Nymex crude oil prices firmer and trading solidly down, at a four-week low and trading around $57.00 a barrel. Meantime, the U.S. dollar index is near steady.
Technically, the gold bulls have the solid overall near-term technical advantage. A seven-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at the June high of $1,442.90. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at the July low of $1,384.70. First resistance is seen at today’s high of $1,431.90 and then at $1,442.90. First support is seen at $1,410.00 and then at $1,400.00. Wyckoff's Market Rating: 7.5
September silver futures bulls have the firm overall near-term technical advantage and have momentum on their side. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at this year’s high of $16.47 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $15.185. First resistance is seen at today’s high of $16.25 and then at $16.47. Next support is seen at the overnight low of $15.96 and then at $15.75. Wyckoff's Market Rating: 7.0.