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Gold Sees Follow-Through Buying, To Begin To Suggest Market Bottom

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(Kitco News) - Gold prices ended the U.S. day session higher Thursday, on important follow-through strength from Wednesday afternoon’s gains. If gold and silver can hold this week’s gains and see some more price upside on Friday, to produce bullish weekly high closes, then such would suggest near-term market bottoms are in place. February Comex gold was last up $8.30 an ounce at $1,256.90. March Comex silver was last up $0.07 at $15.94 an ounce.

Upbeat U.S. economic data released Thursday morning saw a big drop in weekly jobless claims and very strong monthly retail sales data for November, which did dent today’s gains in gold and silver.

The marketplace was still digesting Wednesday afternoon’s FOMC statement and press conference from Fed Chair Janet Yellen. Market watchers were a bit surprised the Fed projected tame inflation prospects for the U.S. in the coming months, or longer. The FOMC statement and Yellen’s press conference were deemed a bit dovish on U.S. monetary policy. Still, the FOMC statement said more interest rate increases are likely in the coming months.

The FOMC news and Yellen’s remarks Wednesday worked to pressure the U.S. dollar index, which in turn helped to lift precious metals market prices.

China’s central bank followed the Fed by slightly raising its interest rates Thursday, in an attempt to offset any U.S. rate hike’s impact on the Chinese economy. The European Central Bank and Bank of England held their regular monetary policy meetings Thursday and made no changes in interest rates, as expected. However, ECB president Mario Draghi sounded an upbeat tone on European Union economic growth prospects in the coming months.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures prices closed near mid-range. Prices Tuesday hit a five-month low. The bears still have the overall near-term technical advantage, but the bulls have gained some momentum late this week. Follow-through buying interest on Friday and a bullish weekly high close would suggest a near-term market bottom is in place. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,280.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the July low of $1,214.50. First resistance is seen at today’s high of $1,261.60 and then at $1,267.00. First support is seen at today’s low of $1,252.80 and then at $1,250.00. Wyckoff's Market Rating: 3.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures prices closed nearer the session low. The bears still have the overall near-term technical advantage, but the bulls have gained a bit of momentum late this week. Good follow-through buying interest on Friday and a bullish weekly high close would suggest a near-term market bottom is in place. A three-week-old downtrend on the daily bar chart has been negated. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the July low of $15.225. First resistance is seen at $16.00 and then at this week’s high of $16.18. Next support is seen at today’s low of $15.855 and then at $15.75. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed up 210 points at 307.45 cents today. Prices closed nearer the session high on more short covering and bargain hunting. The copper bulls have regained the slight overall near-term technical advantage.  Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 320.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 294.03 cents. First resistance is seen at today’s high of 309.00 cents and then at 310.00 cents. First support is seen at today’s low of 303.20 cents and then at 300.00 cents. Wyckoff's Market Rating: 5.5.

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 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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