Gold Hits Record High Wednesday Before Easing on Profit-Taking

EDITOR'S NOTES

Gold reached an all-time high of $2,487.40 (basis August Comex futures) overnight before easing to $2,461.40 by midday Wednesday due to routine profit-taking by short-term traders. Despite this pullback, the bullish outlook for gold remains strong, driven by expectations of lower interest rates from major central banks, including the Federal Reserve. Silver, although sharply lower, is likely to follow gold’s upward trend if the rally continues. Key market influences include a lower U.S. dollar index and rising crude oil prices. Technically, gold bulls aim to close above $2,500, while bears target support at $2,400. Silver’s near-term resistance is at $32.015, with support at $28.90.

Frank Balm Jul 18, 24

Gold prices are trading modestly down at midday Wednesday on some routine profit taking from the shorter-term futures traders after hitting an all-time record high overnight at $2,487.40, basis August Comex futures. Meantime, silver prices are sharply lower. Still, if gold continues to rally in the near term silver will likely tag along. August gold was last down $6.80 at $2,461.40. September silver was down $1.063 at $30.385.

The main underlying bullish fundamental for gold remains in place: ideas of lower interest rates coming from the major central banks yet this year, including from the Federal Reserve.

A Barron’s headline today reads: “Gold, bonds can thrive while Nvidia, mag seven falter in tech exodus.” The story says the “‘Great Rotation,’ as it’s becoming known, won’t be confined to just stocks. Investors have other places to look for more growth.”

U.S. stock indexes are mixed to lower at midday, on profit taking led by technology stocks. The S&P 500 and the Nasdaq indexes recently hit record highs.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly up and trading around $82.75 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.175%.

Technically, August gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,400.00. First resistance is seen at the overnight record high of $2,487.40 and then at $2,500.00. First support is seen at $2,450.00 and then at Tuesday’s low of $2,424.50. Wyckoff's Market Rating: 8.5.

September silver futures bulls have the overall near-term technical advantage, but prices today scored a bearish “outside day” down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $32.015. The next downside price objective for the bears is closing prices below solid support at the June low of $28.90. First resistance is seen at $31.00 and then at today’s high of $31.655. Next support is seen at today’s low of $30.255 and then at $30.00. Wyckoff's Market Rating: 6.5

This article originally appeared on Kitco News.