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P.M. Kitco Metals Roundup: Gold Ends Near Steady in Quieter, Pre-Holiday Trading

Monday December 17, 2012 2:05 PM

(Kitco News) - Comex gold futures prices ended the U.S. day session close to unchanged Monday in subdued trading as the holidays and the end of the year are fast approaching. Many traders and investors are winding things down or stepping to the sidelines until January.

February gold last traded up $0.80 an ounce at $1,697.80. Spot gold was last quoted up $0.40 at $1,697.00.  March Comex silver last traded down $0.034 at $32.265 an ounce.

Attention of the market place remains on the U.S. “fiscal cliff” tax increases and spending cuts that is fast approaching. There now appears to be some movement on the Republicans’ side toward wanting to do a deal. House Speaker Boehner and President Obama met again Monday morning on the matter. The market place reckons odds are a bit higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff. The overall situation remains a bearish drag on many markets, including the raw commodities and stock markets.

In overnight news, European stocks and the Euro currency were weaker on more dour Euro zone economic news. Euro zone exports were reported down 1.4%, month-on-month, in October. Also, the German Bundesbank said Monday the German economy has seen significant contraction heading into the end of the year.

In Japan, the Liberal Democratic Party was swept into power over the weekend, which means Japan’s monetary policy will remain very accommodative. The Japanese yen was sharply lower against the U.S. dollar Monday. Along with the U.S. Federal Reserve’s commitment to easy money announced last week and the European Central Bank being in the same position, such are bullish underlying factors for the raw commodity markets in the coming months.

The U.S. dollar index was slightly lower Monday. The greenback bulls have faded recently. Nymex crude oil futures prices were modestly higher Monday. The crude oil bears still have the slight near-term technical advantage. These two key “outside markets” were in a mildly bullish posture for the precious metals markets Monday, and will continue to impact the precious metals markets on a daily basis.

The London P.M. gold fixing is $1,695.75 versus the previous London P.M. fixing of $1,696.25.

Technically, February gold futures prices closed nearer the session high Monday and saw some mild short covering and bargain hunting. Gold bulls have the slight overall near-term technical advantage but have faded recently and need to show fresh power soon to keep their technical edge. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,725.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the November low of $1,674.70. First resistance is seen at $1,710.00 and then at 1,720.00. First support is seen at $1,690.00 and then at the December low of $1,684.10. Wyckoff’s Market Rating: 5.5

March silver futures prices closed near mid-range Monday and hit a fresh five-week low. The silver bulls have faded recently. Some near-term chart damage has been inflicted in silver and the silver bulls and bears are on a level near-term technical playing field. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $33.875 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $32.00. First resistance is seen at $32.50 and then at Friday’s high of $32.795. Next support is seen at Monday’s low of $32.08 and then at $32.00. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed down 160 points at 366.70 cents Monday. Prices closed near mid-range and saw some more profit taking. The key “outside markets” were mildly bullish for copper today, as the U.S. dollar index was slightly lower and crude oil prices were modestly higher. That did limit selling pressure in copper. Copper bulls still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 375.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 355.00 cents. First resistance is seen at Monday’s high of 369.30 cents and then at last week’s high of 372.10 cents. First support is seen at Monday’s low of 364.75 cents and then at the December low of 363.30 cents. Wyckoff's Market Rating: 6.0.

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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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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