Morning Gold: Gold Moves Up for Correction

gold-correction

(Kitco News)- On Tuesday, in early U.S. trading gold prices are slightly higher, on some charts show consolidation and short covering resulting latest strong selling pressure that last week lured prices to a 2.5-year low. The gold market bears are still in a strong technical command. Spot gold was last quoted up $4.40 at $1,287.50. Comex August gold was last up $8.80 at $1,285.90 an ounce.

On Tuesday, there is a little more risk of demand in the world market place. Also, Tuesday, China central bank officials reported that the cash crunch in China has been controlled, and the latest volatility in its financial markets was impermanent. Concerns around the financial system in China (the world’s second-largest economy) might seize up had the entire world market place on an edge the past few days. The Asian stock markets rallied well off their daily lows on the news while European stock markets also saw a slight increase.

On Tuesday, a European newspaper report quoted an Italian bank as saying it’s likely Italy will soon require an additional financial bailout package as the Italian economy remains to suffering and as credit in that the nation is drying up.

Tuesday morning the U.S. dollar index is weaker on a corrective decrease from recent strong upsurge. Yet, the USD bulls still on their side have technical momentum.

The U.S. economic data that are to be released Tuesday contains durable goods orders, the weekly Goldman Sachs and Johnson Redbook retail sales reports, the Case-Shiller home price index, new residential sales, the Richmond Fed business survey and the consumer confidence index.

The London previous P.M. fixing of $1,286.75 and the A.M. gold fixing is $1,285.00.

Technically speaking, August gold futures prices are in an 8-month-old downtrend on the daily bar chart. The next main, longer-term downside price targets are $1,227, and then at $1,100 and then at $1,027 for near Comex futures. The gold market bears remaining in a strong near-term technical command. Bears’ next near-term downside breakout price objective is closing prices under solid technical support at $1,250.00. The gold bulls next upside near-term price objective is to produce a close over solid technical resistance at the May low of $1,338.00. The first resistance is seen at Monday’s high of $1,300.70 and then at the April low of $1,323.00, as for the first support is seen at last week’s low of $1,268.70 and then at $1,250.00.