Gold, silver down in volatile, 2-sided trading day

Gold and silver prices are trading solidly lower at midday Thursday, in a wild trading day that saw gold prices trade over $30 higher at one point, and down over $25 at another.

Federal Reserve Chairman Jerome Powell’s highly anticipated speech today was deemed bullish, but metals traders quickly discounted it, instead focusing on the metals-bearish aspects of rising U.S. Treasury bond yields as a competing asset. October gold futures were last down $25.90 an ounce at $1,918.20. September Comex silver prices were last down $0.499 at $26.94 an ounce.

Focus of the marketplace today was on Powell’s speech on the U.S. economy, as part of the annual Jackson Hole meeting that is this year virtual.

His speech focused on the Fed changing its monetary policy course and becoming much less concerned about inflation even if it briefly rises above the Fed’s annual 2% target. The upshot is that it will likely be a very long time before the Federal Reserve raises interest rates.

Not overlooked by the Fed is the fact that massive U.S. deficit spending the past few months can be better rectified by higher inflation and a depreciating U.S. dollar.

For gold and silver traders, it could also be a classic case of “buy the rumor and sell the fact” for Powell’s speech on inflation today. Rallying prices in metals and many raw commodity markets recently appeared to already be sensing inflation, and maybe even problematic inflation, could be in store in the coming months, following the massive infusion of central bank liquidity into the global financial system in recent months, to stimulate economies crippled by Covid-19 lockdowns.

Global stock markets were mixed overnight. The U.S. stock indexes are mixed in midday trading. After the S&P 500 and Nasdaq stock indexes hit record highs this week, U.S. traders and investors are now a bit more risk averse late this week, as racial tensions in America are on the rise again. Several professional sports teams opted not to play their games Wednesday, following police shooting an African American man in Wisconsin. Also, Hurricane Laura is inflicting serious damage on the Louisiana and eastern Texas coast Thursday.

The important outside markets today see Nymex crude oil prices down and trading around $42.80 a barrel. Hurricane Laura is lashing Texas and Louisiana and has shut in much of the U.S. Gulf coast oil and gas installations. That pushed gasoline futures prices to a five-month high this week. The U.S. dollar index is near steady in choppy trading.

Technically, October gold futures bulls still have the firm overall near-term technical advantage amid choppy trading at higher levels. Prices are still in a five-month-old uptrend on the daily bar chart.

Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,865.00.

First resistance is seen at Wednesday’s high of $1,955.50 and then at today’s high of $1,978.50. First support is seen at this week’s low of $1,901.40 and then at $1,900.00. Wyckoff’s Market Rating: 7.0

September silver futures bulls still have the firm overall near-term technical advantage amid a five-month-old price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the August high of $29.915 an ounce.

The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.50 and then at today’s high of $28.035. Next support is seen at last week’s low of $26.095 and then at $26.00. Wyckoff’s Market Rating: 7.0.

September N.Y. copper closed up 95 points at 297.10 cents today. Prices closed nearer the session high today. The copper bulls have the solid overall near-term technical advantage.

Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 310.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 276.90 cents.

First resistance is seen at 300.00 cents and then at the August high of 302.95 cents. First support is seen at this week’s low of 291.15 cents and then at 288.00 cents. Wyckoff’s Market Rating: 7.5.