Gold prices reached another record high Tuesday, driven by bullish charts and strong demand, particularly from China. However, the prices slightly retracted from the peak by midday in the U.S. market. December Comex gold futures set a new all-time high of $2,570.40 early in the day, while silver prices also saw an uptick, reaching a four-week high earlier in the session. By midday, December gold futures were trading at $2,546.70, up $5.40, while September silver futures increased by $0.151, standing at $29.455.
In a morning email dispatch, broker SP Angel highlighted the influence of Chinese market activities on gold prices. “Chinese exporters and traders have been observed rushing to buy yuan and likely gold, in anticipation of further U.S. dollar weakness. The metal has also been supported by Chinese buying following the central bank’s crackdown on local government bond purchases. Additionally, turmoil in China’s property sector has led gold to become a preferred savings instrument for individuals in China.”
The People’s Bank of China maintained its main interest rates during its central bank meeting on Tuesday, contributing to the stability in gold demand.
Market participants are now turning their attention to the upcoming Jackson Hole Federal Reserve symposium, which kicks off later this week. Historically, this event has featured significant market-moving announcements from central bank officials. Fed Chairman Jerome Powell is expected to speak at the symposium, where he may provide insights into the timing of a potential U.S. interest rate cut.
In the broader market, the U.S. dollar index continued its downward trend, hitting a seven-month low. Meanwhile, Nymex crude oil prices weakened, trading around $74.00 per barrel. The benchmark 10-year U.S. Treasury note was yielding approximately 3.85%.
Traders are also anticipating the release of the minutes from last week’s Federal Open Market Committee (FOMC) meeting on Wednesday afternoon, which could offer further clues on the Federal Reserve’s monetary policy outlook.
From a technical perspective, December gold futures bulls hold a strong near-term advantage, with their next target being to close above solid resistance at $2,600.00. Conversely, bears are aiming to push prices below the support level at $2,450.00. Initial resistance is expected at the recent record high of $2,570.40, followed by $2,600.00, while first support is seen at today’s low of $2,535.10, and then at this week’s low of $2,523.70. Wyckoff’s Market Rating for December gold stands at 9.5.
Similarly, September silver futures bulls possess a near-term advantage with momentum on their side. The bulls are targeting a close above the $30.00 resistance level, while bears are eyeing a close below $28.00 for a downside move. First resistance is anticipated at $30.00, followed by $30.50, with initial support at the overnight low of $29.255 and further support at $29.00. Wyckoff’s Market Rating for September silver is 6.0.