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P.M. Kitco Metals Roundup: Gold Ends Firmer on Weaker U.S. Dollar and Some Safe-Haven Demand

Monday April 1, 2013 2:15 PM

(Kitco News) - Gold prices ended the U.S. day session modestly higher Monday. The precious metal was given a boost by a weaker U.S. dollar index. There was also some fresh safe-haven buying interest in gold Monday as North Korea’s leader continues to make threatening comments toward the U.S. and South Korea. June Comex gold last traded up $4.20 at $1,599.90 an ounce. Spot gold was last quoted up $2.00 at $1,600.00.  May Comex silver last traded down $0.353 at $27.97 an ounce.

The North Korean situation is not a full blown geopolitical crisis—at least not yet—but the matter is of serious enough consequence that gold is receiving a modest safe-haven demand boost from investors. North Korea’s rhetoric will continue to be closely monitored by the market place, and could turn more serious very quickly.

U.S. economic data released Monday included the U.S. manufacturing PMI, construction spending and the ISM manufacturing report on business. Overall, that data was just a bit on the weak side, which was also mildly supportive for the precious metals markets Monday.

The Cyprus bank bailout situation has calmed down for the moment, with most of Europe on vacation for the Easter holiday Monday. However, the overall European Union sovereign debt crisis remains as an undercurrent in the risk assessment of the market place and will also remain supportive for safe-haven assets like gold.

In overnight news, China’s official purchasing managers’ index was 50.9 in March, which is up from 50.1 in February but just below market expectations.

Traders and investors are looking ahead to Friday’s release of the U.S. employment situation report, which is arguably the most important U.S. economic report of the month.

The U.S. dollar index was lower Monday on profit taking after hitting a 7.5-month high last week. The U.S. dollar bulls still hold the overall technical advantage, which is an underlying bearish factor for the gold and silver markets. Meantime, Nymex crude oil futures prices were weaker Monday afternoon, but did hit a six-week high overnight. The crude oil bulls still have the near-term technical advantage, which is an underlying bullish factor for the precious metals bulls. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.

Technically, June gold futures prices closed nearer the session high Monday. The gold bears still have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,618.30. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,577.00. First resistance is seen at last Thursday’s high of $1,608.30 and then at last week’s high of $1,614.50. First support is seen at last week’s low of $1,590.40 and then at $1,585.00. Wyckoff’s Market Rating: 4.0

May silver futures prices closed nearer the session low Monday and hit a fresh eight-month low. Silver bears have the overall near-term technical advantage and gained more downside momentum Monday. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $28.89 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $27.00. First resistance is seen at Monday’s high of $28.36 and then at $28.50. Next support is seen at Monday’s low of $27.81 and then at $27.50. Wyckoff's Market Rating: 2.5.

May N.Y. copper closed down 290 points at 337.30 cents Monday. Prices closed near mid-range and hit a fresh eight-month low. Copper bears have the solid overall near-term technical advantage and gained more downside momentum Monday. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week’s high of 348.65 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August 2012 low of 332.00 cents. First resistance is seen at 340.00 cents and then at 342.50 cents. First support is seen at 335.00 cents and then at Monday’s low of 334.00 cents. Wyckoff's Market Rating: 2.5.

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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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