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A.M. Kitco Metals Roundup: Gold Sharply Up, At 3-Mo. High, On Safe-Haven Demand

Tuesday August 27, 2013 8:21 AM

(Kitco News) - Gold prices are solidly higher, have pushed well above the $1,400.00 mark, and hit a fresh nearly three-month high in early U.S. trading Tuesday. Safe-haven investor demand and technically related buying are featured. December Comex gold was last up $24.40 at $1,417.50 an ounce. Spot gold was last quoted up $13.50 at $1419.00. September Comex silver last traded up $0.46 at $24.47 an ounce.

It’s a “risk-off” day in the world market place Tuesday, as the U.S. appears poised to take military action against Syria after its government regime used chemical weapons against its citizens. Asian and European stock markets sold off and U.S. stock indexes are under pressure before the open Tuesday morning. There are worries any U.S. military intervention in Syria could escalate into further instability and violence in the already volatile Middle East. Emerging country financial markets and currencies are again seeing strains amid the risk aversion in the market place. The Indian rupee hit another record low versus the U.S. dollar Tuesday.

In European Union news Tuesday, the German Ifo business confidence index rose for the fourth month in a row and to its highest level in over a year, to 107.5 in August from 106.2 in July. This is yet another signal that the EU’s biggest economy is helping to pull the Euro zone out of economic recession.

The key “outside markets” are in a neutral daily posture for the precious metals markets Tuesday morning. The U.S. dollar index is firmer on more short covering, which is mildly bearish for the precious metals. The greenback still bears have the overall near-term chart advantage. Meantime, Nymex crude oil futures prices are sharply higher early Tuesday and closing in on $110 a barrel. The crude oil bulls have the solid overall near-term technical advantage.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the Chicago Fed Midwest manufacturing index, the consumer confidence index, the Richmond Fed business activity survey, and the Case-Shiller home price index.

The London A.M. gold fix is $1,411.00 versus the previous P.M. fixing of $1,377.50.

Technically, December gold futures bulls have the near-term technical advantage for the first time in months, as prices hit a nearly three-month high overnight. A two-month-old uptrend is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the June high of $1,426.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,350.00. First resistance is seen at the overnight high of $1,418.80 and then at $1,426.00. First support is seen at $1,400.00 and then at the overnight low of $1,395.20.

September silver futures bulls have the overall near-term technical advantage. Prices hit another four-month high overnight. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $23.00. First resistance is seen at $24.75 and then at $25.00. Next support is seen at $24.25 and then at the overnight low of $23.98.

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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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