|A.M. Kitco Metals Roundup: Gold Higher as U.S. Dollar Index Weakens, Crude Oil Rallies
By Jim Wyckoff
A weaker U.S. dollar index and higher crude oil prices are supporting fresh buying interest in Comex gold futures Wednesday morning. June gold was last traded up $5.70 an ounce at $1,159.10. Traders viewed Tuesday's price setback as a buying opportunity as the overall technical picture for gold remains fully bullish.
Underlying support for gold continues to come from Greece's sovereign debt situation and the efforts of the European Union to deal with it. While more steps were taken this week to offer financing to Greece, many gold traders remain very skeptical that Greece can ultimately get out from under its huge debt burden without further economic and financial harm to the EU. That is leading to further buying interest in gold as a hedge against European currencies.
In overnight news, a report said first-quarter investment in gold dropped from the year-earlier period, but added that fresh investor demand could drive gold prices to a new all-time high. The U.K. firm GFMS said investor demand for gold will become greater in the coming months. The firm said inflation concerns and worries about European Union debt are the main bullish forces for gold.
The London A.M. gold fix was $1,159.00 versus the previous P.M. fixing of $1,148.25.
Technically, June Comex gold futures bulls have upside near-term technical momentum. Prices hit a fresh four-month high on Monday. Prices are still in a two-month-old uptrend on the daily bar chart. For June gold, shorter-term technical resistance is seen at this week's high of $1,170.70 and then at $1,175.00. Buy stops likely reside just above those levels. Sell stops likely reside just below shorter-term support at the overnight low of $1,151.00 and then at this week's low of $1,145.40. Today's key near-term Fibonacci pivot level for June gold: $1,139.00. From a longer-term perspective, an examination of the monthly continuation chart for nearby Comex gold futures shows a solid longer-term price uptrend remains firmly in place, which suggests that in the coming months, the path of least resistance for the precious yellow metal will remain sideways to higher.
By Jim Wyckoff, contributing to Kitco News; email@example.com