Gold and silver price erosion continues as crude oil crumbles, dollar rises

Editor’s Note: Stay up to date with the daily news with a lot of market volatility! Get a quick summary of today’s must-read news and expert opinions in minutes. Sign up here!

(Kitco News) – Gold Under strong selling pressure, silver tumbled modestly in US trade mid-day on Wednesday. Gold hit an 8.5-month low today and silver hit a two-year low. Metal bulls remain protected by a stronger US dollar index hitting a 20-year high today and crude oil prices that have dropped nearly $10 in just two trading days so far this week. Short-term technical charts for gold and silver are also fully bearish, encouraging chart-based traders to play the short sides of the futures markets. August gold futures it was last down $25.00 at $1,739.50. September Comex silver futures were last down $0.141 at $18.98 an ounce.

US stock indexes are weak at midday. Recession and inflation concerns continue to weigh on trader and investor risk appetite. Fears of recession now seem to outpace fears of inflation, as evidenced by the massive sell-off in many crude commodity futures markets on Tuesday, spearheaded by the massive decline in Nymex crude futures. Metals traders are also focusing on expectations of a decline in consumer and commercial demand if a US and/or global recession begins.

Traders are waiting for the minutes of the Federal Reserve’s last FOMC meeting to be released this afternoon.

Data point of the week in the US is the June employment status report on Friday. The number of core non-farm jobs is expected to rise to 250,000, compared to an increase of 390,000 in the May report.

Major foreign markets are seeing Nymex crude oil prices fall solidly, trading around $95.50 a barrel today. The US dollar index rose solidly and hit a 20-year high today. The 10-year US Treasury bill yields 2.888%. The 2-year and 10-year note reversed at some point today (2-year yield was higher than 10-years), another clue that the US economy is in recession.

Technically, August gold futures prices hit an 8.5-month low today. The bears have a solid overall technical advantage and momentum in the short term. Prices are in a four-month downtrend on the daily bar chart. The bulls’ next upside price target is to produce a close above solid resistance at $1,800.00. Bears’ next short-term bearish price target is to push futures prices below solid technical support at $1,700.00. Initial resistance is seen at $1,750.00 followed by today’s high at $1,771.50. Initial support is seen at $1,725.00 followed by $1,700.00. Wyckoff’s Market Rating: 1.5.

September silver futures prices hit a two-year low today. Silver bears generally have a short-term technical advantage. Silver bulls’ next upside price target is to close prices above solid technical resistance at $20,525/ounce May’s low. The next downside price target for the bears is to close prices below solid support at $18.00. Initial resistance is seen at today’s high at $19,325 followed by $19.85. The next support is seen at today’s low at $18,705 followed by $18.50. Wyckoff’s Market Rating: 1.0.

July NY copper closed 395 points at 338.55 cents today. Prices closed close to the session low today and hit a 1.5-year low today. Copper bears generally have a short-term technical advantage. There is a steep four-week price downtrend on the daily bar chart. The copper bulls’ next upside price target is to push prices above last week’s high of 384.30 cents and close above solid technical resistance. The next downside price target for the bears is to close prices below solid technical support at 325.00 cents. Initial resistance is seen at today’s high of 346.35 cents followed by 350.00 cents. Initial support is seen at today’s low of 337.00 cents, followed by 330.00 cents. Wyckoff’s Market Rating: 1.0.