Gold sees routine pause Wednesday after recent gains

Gold prices slightly declined in Wednesday's midday trading session in the US. Profit-taking activities from short-term futures traders were highlighted, driven by the midweek recovery of the US dollar index. Gold for August delivery last dropped by $1.5 to $1,979.

US stock indices were mixed at midday. Speculators betting on the rise of US stock indices are enjoying the upward trend on the daily bar chart, with prices reaching their highest level this year. Solid quarterly earnings from US banks are also pushing stock prices higher. The recovery of stock indices may be attracting some price appreciation for the precious metals market as they compete with other asset classes.

Comment:

In technical terms, gold futures speculators have a short-term technical advantage as prices are in a new uptrend on the daily chart. Their next price target is to close the August futures contract above a strong resistance level at $2,000. On the other hand, bears' short-term price target is to push the futures contract below a solid technical support level at $1,900. The first resistance levels seen overnight were at $1,989 and then $2,000. The first support levels seen on Wednesday were at $1,973 and then Tuesday's low at $1,958.

Comment:

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