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A.M. Kitco Metals Roundup: Gold Near Steady as Market Place Generally Quiet so far Today

Wednesday January 09, 2013 8:15 AM

(Kitco News) - Comex gold futures prices are hovering near unchanged in subdued trading early Wednesday. The market place is awaiting fresh fundamental inputs for direction. A firmer U.S. dollar index is limiting buying interest in the precious metals so far Wednesday. February gold last traded down $0.60 an ounce at $1,661.60. Spot gold was last quoted up $0.30 at $1,661.75.  March Comex silver last traded down $0.09 at $30.375 an ounce.

Asian and European markets were quiet overnight amid the lack of major, fresh fundamental news developments. Fourth-quarter U.S. corporate earnings reports are starting to flow in, with Alcoa’s results coming in about as expected. The market place is also wondering what the next moves will be by U.S. lawmakers and the Obama administration regarding taxing and spending measures. Most look for a big fight among the politicians, which is keeping a lot of speculative and investment money on the sidelines at present. Traders are awaiting Thursday’s monthly European Central Bank meeting. Asian traders are awaiting a fresh batch of Chinese economic data due out later this week and during the weekend.

The U.S. dollar index is higher early Wednesday. The dollar bulls have some upside near-term technical momentum to suggest the dollar index has put in a near-term market bottom. That is a bearish underlying fundamental factor for the precious metals markets at present. Meantime, Nymex crude oil futures prices near steady Wednesday morning. The crude oil bulls still have some upside near-term technical momentum, and that’s a bullish underlying factor for the metals markets. These two key “outside markets” will continue to impact the precious metals markets on a daily basis.

U.S. economic data due for release Wednesday is light and includes the weekly MBA mortgage applications survey and the weekly DOE energy stocks report.

The London A.M. gold fixing is $1,663.50 versus the previous London P.M. fixing of $1,656.00.

Technically, February gold futures still see a three-month-old downtrend in place on the daily bar chart. Near-term chart damage has been inflicted just recently. However, recent priced action hints that the bears have become exhausted on the downside. But gold bears have the overall near-term technical advantage and the bulls still have heavy lifting to do to suggest a near-term price uptrend can be sustained. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,695.40. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,626.00. First resistance is seen at the overnight high of $1,666.00 and then at $1,675.00. First support is seen at the overnight low of $1,657.50 and then at $1,650.00.

March silver bears have the overall near-term technical advantage. However, price action recently suggests the bears have run out of gas on the downside. A six-week-old downtrend on the daily bar chart remains in place for silver. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $31.535 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $29.24. First resistance is seen at this week’s high of $30.59 and then at $30.79. Next support is seen at $30.25 and then at $30.00.

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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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