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P.M. Kitco Metals Roundup: Gold Ends Weaker On Bearish Outside Markets, Technical Selling

Tuesday February 10, 2015 1:54 PM

(Kitco News) - Gold prices ended the U.S. day session moderately lower Tuesday, pressured by a firmer U.S. dollar index and solidly lower crude oil prices. The recent deterioration in the chart postures for gold and silver markets have prompted some new technical selling recently. April Comex gold was last down $10.30 at $1,231.30 an ounce. March Comex silver last traded down $0.215 at $16.855 an ounce.

Crude oil prices were sharply lower today following a recent short-covering bounce. While there are fundamental market watchers who say there is more downside for the crude oil market, there are also still a few early technical chart clues the crude market has already hit at least a near-term bottom. The other key outside market saw the U.S. dollar index higher Tuesday. There are no early technical clues the U.S. dollar index has put in a market top and the greenback bulls remain very strong.

Focus of the world market place is still on Greece’s new government, which says it is abandoning a good portion of its heretofore agreed upon debt reduction and austerity measures. Those measures were a prerequisite for Greece to get more financing from the European Union. There is a EU and Greek officials meeting set for Wednesday on the matter. Germany is taking a hard line with Greece, saying the country needs to honor its previous obligations. Traders and investors are in a more risk averse mood this week as this situation plays out. There are worries Greece could exit the European Union, which would open the door to other, smaller EU countries doing the same.

Chinese inflation fell to a five-year low in January, it was reported today, mainly due to falling raw commodity prices led by crude oil, and weaker demand.  China’s consumer price index was up 0.8% in January, year-on-year. China also injected liquidity into its financial system for the seventh week in a row, in another effort to boost its economy.

The London P.M. gold fix was $1,234.50 versus the previous A.M. fixing of $1,237.50.

Technically, April gold futures prices closed nearer the session low today and scored a bearish “outside day” down on the daily bar chart. The gold bears have the near-term technical advantage. A fledgling downtrend is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,255.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at $1,240.00 and then at today’s high of $1,245.90. First support is seen at last week’s low of $1,228.20 and then at $1,220.00. Wyckoff’s Market Rating: 4.0

March silver futures prices closed near mid-range today. Silver bears have the near-term technical advantage. A fledgling downtrend is now in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $17.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at this week’s high of $17.145 and then at $17.37. Next support is seen at this week’s low of $16.685 and then at last week’s low of $16.545. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 315 points at 254.90 cents today. Prices closed near mid-range. The key “outside markets” were bearish for copper today—higher U.S. dollar index and solidly lower crude oil prices. The copper market bears have the firm overall near-term technical advantage as are in a six-month-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 241.90 cents. First resistance is seen at this week’s high of 259.05 cents and then at last week’s high of 261.85 cents. First support is seen at today’s low of 252.55 cents and then at 250.00 cents. Wyckoff's Market Rating: 2.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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