Wednesday November 14, 2012 2:33 PM
(Kitco News) - Comex gold prices ended the U.S. day session firmer Wednesday on some mild bargain hunting and amid some more chart consolidation. The key “outside markets” were in a bullish posture for the precious metals for most of the trading session Wednesday, as the U.S. dollar index was weaker and crude oil prices were higher. December gold last traded up $3.00 at $1,727.80 an ounce. Spot gold was last quoted up $3.10 at $1,728.50. December Comex silver last traded up $0.218 at $32.70 an ounce.
There were two important U.S. news events late in the trading session Wednesday, neither of which did much to move the precious metals markets. President Obama’s news conference saw him address the so-called fiscal cliff matter that looms, as well as other issues. The U.S. stock indexes did weaken modestly during the Obama press briefing.
Also, the FOMC meeting minutes were released Wednesday afternoon, with the main focus being a discussion on whether the Fed should use other indicators for its monetary policy guidance, especially when to start raising interest rates. Presently, the Fed is using a calendar date to estimate when rates will start to rise--mid-2015. Another method would be to use economic indicators as a guide. The gold and silver markets very briefly popped up on the FOMC minutes, but then quickly moved back to price levels seen before the minutes were released.
In overnight news, the Euro currency made modest gains against the U.S. dollar, suggesting at least the European Union sovereign debt crisis did not worsen the past 24 hours. However, there was more dour economic news coming out of the EU, which suggested the bloc is headed for, or already in, economic recession. Overall industrial production in the EU countries fell 2.5% in September, it was reported Wednesday. There is key economic data coming out of the EU on Thursday, as gross domestic product data is released by the major EU countries.
If recent history repeats itself Greece will soon be back on the front burner of the market place, regarding fresh EU bailout money and the debating about when and if to disburse fresh funds to the cash-starved country. There was a German newspaper report Tuesday that suggested the EU might soon shell out one big lump sum of cash to Greece, to the tune of $56 billion. That did somewhat buoy European markets. Many doubt that plan will actually occur, however. Spanish and Italian bond yields did back off a bit Wednesday, which is also a clue of anxiety levels in the market place that are not rising.
A European Central Bank official once again stressed Wednesday that ECB monetary policy cannot solve the economic structural problems facing the EU. Such can also be said about monetary policy being able to solve the U.S.’s economic structural problems.
The U.S. dollar index was modestly lower Wednesday but is hovering near a two-month high. The U.S. dollar bulls still have upside near-term technical momentum. Meantime, Nymex crude oil prices were higher Wednesday on short covering. The crude oil bears still have the overall near-term technical advantage as a two-month-old downtrend is in place on the daily bar chart.
The London P.M. gold fixing was $1,725.75 versus the previous P.M. fixing of $1,726.25.
Technically, December gold futures prices closed nearer the session high. Gold bulls have the overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,755.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the November low of $1,672.50. First resistance is seen at last week’s high of $1,739.40 and then at $1,750.00. First support is seen at Wednesday’s low of $1,720.50 and then at this week’s low of $1,717.60. Wyckoff’s Market Rating: 6.5
December silver futures prices closed nearer the session high Wednesday and hit a fresh four-week high. Silver bulls have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $33.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of $30.655. First resistance is seen at $33.00 and then at $33.325. Next support is seen at Thursday’s low of $32.365 and then at $32.00. Wyckoff's Market Rating: 6.5.
December N.Y. copper closed down 100 points at 346.10 cents Wednesday. Prices closed nearer the session low. Copper bears have the overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 357.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 335.00 cents. First resistance is seen at 350.00 cents and then at 352.50 cents. First support is seen at 345.00 cents and then at this week’s low of 342.15 cents. Wyckoff's Market Rating: 3.0.
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By Jim Wyckoff, contributing to Kitco News; firstname.lastname@example.org