Morning Gold: Gold on a Correction Status


(Kitco news)- On Friday in early U.S. trading, gold prices are slightly higher, on a technical correction bounce after August Comex futures dropped to a two and a half year low of $1,268.70 in overnight trading. The gold market bears remain in a solid technical control of their markets. Spot gold was last quoted up $18.60 at $1,297.00. Comex August gold last traded up $9.20 at $1,295.30 an ounce.

The market is a little cooler as traders’ eyes moves towards the U.S. stock market in action Friday morning. On Thursday, Asian stocks followed Wall Street’s lower price act. Asian stocks were as well stressed by concerns around a financial liquidity issue happening in China while interest rates having a surge lately. On Thursday, weaker economic data from China moreover alarmed the Asian markets. On Friday, Japan’s Nikkei managed to post some gains.

The European markets steadied and were displaying slight corrective bounces from Thursday’s selling heaviness. There have been several new financial issues appearing in Greece late this week, which moved the Greek 10-year bond yield over 11%.

There was a strong flow of investment monies from emerging markets lately. Actually, it seems that most of the world market places are heading keener on cash, whereas showed by most market places are selling off late this week. An old market adage is taking place that states when the going gets uneven, if you cannot sell what you want, you sell what you can.

The market is still processing Wednesday’s U.S. Federal Reserve announcements, where traders and investors mostly decided the Fed will start to cut down its monthly bond-buying (quantitative easing) program  at the end of this year. A large number of markets didn’t take well that dose of news, although the Fed’s action on Wednesday wasn’t surprising.

On Friday morning,  the U.S. dollar index is moderately higher, whereas prices have made a significant recovery from Wednesday’s four-month low. The strong recovery in the USD does recommend the USD index has to put in a near-term low.

There are no notable U.S. economic data that are going to be released Friday.

The London previous P.M. fixing of $1,292.50 and A.M. gold fixing is $1,290.25.

Technically speaking, there’s an advantage in the near term for more technical selling pressure in gold. The upcoming main, longer-term downside price targets for nearby Comex futures are $1,227, and then at $1,100 and then at $1,027. August gold futures prices are in an 8-month-old downtrend on the daily bar chart. The gold market bears are in a strong near-term technical control. The gold bears’ next near-term downside breakout price objective is ending prices under solid technical support at $1,250.00. The gold bulls’ upcoming upside near-term price objective is to make a close over solid technical resistance at the May low of $1,338.00. The first resistance is sighted at the April low of $1,323.00 and then at $1,338.00, as for the first support is sighted at the overnight low of $1,268.70 and then at $1,250.00.