Gold, silver see safe havens and chart based buys

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(Kitco News) — Gold and silver prices are higher in US trading at noon on Thursday, with gold soaring to hit a four-week high – now within striking distance of $1,800.00. Safe haven demand is presented today as tensions between China, Taiwan and the US escalated this week. Short covering in futures markets and some new chart-based buying are also featured today as short-term technical positions for both metals have improved this week. Gold October futures were last up $29.80 to $1,796.00. Comex September silver futures were last up $0.226 to $20.12 an ounce.

The market was a little more nervous today after China fired multiple ballistic missiles at Taiwan in apparent retaliation for US House Speaker Nancy Pelosi’s visit to Taiwan on Tuesday. China is conducting aggressive military maneuvers around Taiwan.

At the conclusion of the Bank of England’s monetary policy meeting on Thursday, the BOE raised interest rates by 0.5%, the highest since 1995. The BOE also warned of a long economic recession for the UK Safe-haven buying in gold and silver. Some argue that while the Federal Reserve is reluctant to look that far out, the BOE is probably more on track to forecast a prolonged recession — especially when the outlook isn’t rosy.

The market looks ahead to Friday morning’s US jobs report for July, which is expected to show nonfarm payrolls growth of around 260k compared to a 372k increase in the June report.

Major outside markets today see Nymex crude prices at a 4.5-month low, trading around $88.00 a barrel. US Dollar Index lower in US midday trade. The yield on the 10-year US Treasury is around 2.7%.

Technically, October gold futures prices hit a four-week high today. The gold futures bears still have the overall near-term technical advantage. However, an upward price uptrend is still present on the daily bar chart, suggesting that a market bottom is in place. The bulls have momentum and their next target on the upside is to find a close above the solid resistance at $1,850.00. Bears’ next short-term downside target is to push futures prices below the solid technical support at $1,720.00. Initial resistance is seen at $1,800.00 and then $1,825.00. Initial support is seen at $1,775.00 and then today’s low of $1,769.50. Wyckoff’s market rating: 4.0.

Silver futures bears in September have the overall short-term technical advantage. However, a price downtrend has been negated, suggesting that a market bottom is in place. The silver bulls’ next target is to close above the solid technical resistance at $21.50. The next downside target for the bears is a close below the solid support at $19.00. Initial resistance is seen at this week’s high of $20.51 and then $20.75. Next support is seen at the weekly low of $17.75 and then $19.40. Wyckoff’s market rating: 3.0.

September NY Copper closed up 145 points today at 348.15 cents. Prices closed closer to the session high today. The copper bears have the short-term overall technical advantage. However, a steep six week old price downtrend on the daily bar chart has been negated and prices are starting to trend higher. The copper bulls’ next price target is to push and close prices above the solid technical resistance at 385.00 cents. The next downside target for the bears is a close below solid technical support at the July low of 313.15 cents. Initial resistance is seen at the weekly high of 359.70 cents and then 365.00 cents. Initial support is seen at today’s low of 341.60 cents and then 335.00 cents. Wyckoff’s market rating: 3.0.

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