Jim Wyckoff - Daily Gold Market Updates

U.S., Iran continue their military strikes. The U.S. and Iran exchanged fresh strikes over the weekend and into Monday as they continued their tit-for-tat attacks while issuing conflicting declarations over whether the Strait of Hormuz is open to shipping. U.S. Central Command said American forces carried out a new round of attacks to degrade Iran’s ability to threaten shipping in the narrow waterway, hitting dozens of targets including Iranian air-defense systems and missile capabilities. Tehran retaliated with attacks on U.S. allies in the Persian Gulf and beyond, targeting U.S. bases in Kuwait, Bahrain and Jordan. European and U.S. stocks fell as oil prices rose on the military action in the Middle East. A handful of ships have passed through the Strait of Hormuz in secret in recent days, even as observable crossings all but ceased after a flare-up in fighting between the US and Iran, according to Bloomberg. All of the six commodity carriers that transited Hormuz on Sunday did so with their transponders turned off, according to preliminary Kpler data analyzed by Bloomberg News.

Fed Chair Warsh appears before Congress this week… Kevin Warsh is about to make his first appearance before Congress as Federal Reserve chairman, “and during two days of testimony he’ll have new U.S. inflation data to parse with lawmakers,” said a Bloomberg report. “Tuesday’s House Financial Services Committee hearing, which begins at Tuesday morning, will be preceded by June consumer price figures from the Bureau of Labor Statistics. Then on Wednesday, shortly after the BLS releases U.S. producer price data, Warsh will testify before a Senate committee,” said the report. Economists surveyed by Bloomberg expect both reports to show some relief following a surge in prices from March to May. “Markets currently imply 24% probability of a July hike — too low to think the Fed is realistically going to move then. For that to rise much would likely require both a hot CPI report and an overtly hawkish Fed chairman on Tuesday — both unlikely, in our opinion,” said Bloomberg Economics. CPI inflation is expected to slow below 4%, annually, in June from May’s three-year high of 4.2%, amid a slowdown in energy inflation. Core CPI is forecast to hold at 2.9%, on an annual basis, the highest since last September.

The key outside markets today see the U.S. dollar index slightly down. August Nymex WTI crude oil prices are higher and trading around $73.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.6%.

Technically, August gold futures are lower in early U.S. trading. Prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $4,238.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $3,955.40. First resistance is seen at the overnight high of $4,111.60 and then at $4,148.40. First support is seen at the overnight low of $4,052.00 and then at $4,032.50. Wyckoff's Market Rating: 2.5

September silver futures are lower early today. The next upside price objective for the bulls is closing prices above solid technical resistance at $65.00. The next downside price objective for the bears is closing prices below solid support at $50.00. First resistance is seen at $60.00 and then at Friday’s high of $61.195. Next support is seen at last week’s low of $57.605 and then at the June low of $56.13. Wyckoff's Market Rating: 2.0