Gold prices are slightly up and scored a four-week high in early U.S. trading Monday. Follow-through buying interest is featured after Friday’s good gains that produced a technically bullish weekly high close, to suggest still more upside price action in the near term. The precious metals bulls are finally reaping some benefit from a U.S. dollar index that has been trending lower all year long. August Comex gold was last up $1.20 an ounce at $1,256.10. September Comex silver was last up $0.053 at $16.51 an ounce.
Focus of the world marketplace this week will be on the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends early Wednesday afternoon with a statement. No changes in U.S. monetary policy are expected at this meeting. However, the tone of the FOMC statement will be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U.S. monetary policy.
There is still lingering concern in the marketplace about the Trump Administration delivering on all of its pro-business and pro-economic-growth promises made before and just after last November’s election. Nearly six months into the Trump presidency, little has been accomplished on that front. Last week’s failure to pass new health care legislation dealt a major setback to Trump. This matter has contributed to a depreciating U.S. dollar in world currency markets.
The U.S. dollar index is slightly higher early today on a tepid corrective bounce after hitting a 14-month low overnight.
The other important “outside market” on Monday morning sees Nymex crude oil futures firmer and trading just above $46.00 a barrel. OPEC oil ministers were meeting today in St. Petersburg, Russia. Headlines are starting to show up on newswires, as OPEC ministers are commenting. However, no official statement from OPEC has been seen yet.
U.S. economic data due for release today includes the U.S. flash services PMI, the flash manufacturing PMI, and existing home sales.
Technically, August gold futures bulls have gained the slight overall near-term technical advantage and have momentum. Their next upside technical objective is pushing prices above psychological resistance at the $1,300.00 mark. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,240.00. First resistance is seen at today’s high of $1,258.00 and then at $1,260.00. First support is seen at the overnight low of $1,252.00 and then at $1,250.00. Wyckoff’s Market Rating: 5.5
September silver bears still have the overall near-term technical advantage. However, there are chart clues that a near-term market bottom is in place. The next upside price breakout objective is closing futures prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the July low of $15.145. First resistance is seen at $16.70 and then at $16.915. Next support is seen at $16.28 and then at $16.11. Wyckoff’s Market Rating: 3.0.