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P.M. Kitco Roundup: Gold Ends Solidly Lower on Profit Taking, Less Risk Aversion

Wednesday September 4, 2013 2:41 PM

(Kitco News) - Gold prices ended the U.S. day session solidly lower Wednesday, on profit taking from short-term traders and on a technical correction from recent gains. The geopolitical tensions in the market place eased just a bit Wednesday, which also helped to limit any new safe-haven demand for gold. December Comex gold was last down $22.60 at $1,389.40 an ounce. Spot gold was last quoted down $22.60 at $1390.00. December Comex silver last traded down $1.044 at $23.39 an ounce.

The afternoon release of the U.S. Federal Reserve’s “beige” book detailed a U.S. economy that is growing modestly to moderately, depending on the sector. This news was not unexpected nor much different from recent Fed reports and comments from Fed officials, and thus was not markets-moving. Major world economic data is just around the corner. The important U.S. jobs report is out on Friday. The Bank Japan, Bank of England and European Central Bank hold their monthly monetary policy meetings on Thursday. There is also a Group of 20 nations meeting this week.

The market place is still a bit anxious regarding the U.S. threat to attack Syria after the Assad regime allegedly used chemical weapons against Syrian citizens. However, comments by President Obama on Wednesday seemed to assuage market anxieties somewhat, as the President did not use hawkish rhetoric when asked about the matter at a press briefing. The U.S. Congress appears to be backing President Obama on his notion to use U.S. firepower to strike Syria. Still, it appears unlikely that a U.S. strike will occur this week, as congressional debate and voting on the matter will not be completed likely until sometime next week.

Interest rates continue to rise in the major economies of the world. German five-year notes fetched a 21-month high yield of 1.00% Wednesday. U.S. bond yields are also at two-plus year highs. Such suggests growing world economies, which in turn is a bullish factor for the raw commodity sector, including the precious metals, from a demand perspective.

The London P.M. gold fix is $1,390.00 versus the previous P.M. fixing of $1,399.50.

Technically, December gold futures closed nearer the session low Wednesday as short-term traders took some profits and on technical chart consolidation from recent gains. The gold market bulls still have the overall near-term technical advantage. A nine-week-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 August high of $1,434.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,350.00. First resistance is seen at $1,400.00 and then at this week’s high of $1,416.40. First support is seen at this week’s low of $1,373.60 and then at $1,360.00. Wyckoff’s Market Rating: 6.0

December silver futures prices closed near the session low Wednesday and saw profit taking and chart consolidation. Silver bulls still have the near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $26.00 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 $24.00 and then at this week’s high of $24.53. Next support is seen at this week’s low of $23.11 and then at $23.00. Wyckoff's Market Rating: 6.0.

December N.Y. copper closed down 595 points at 324.50 cents Wednesday. Prices closed nearer the session low and gave back most of Tuesday’s big gains. Copper bulls and bears are on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the August high of 339.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 320.00 cents. First resistance is seen at 327.50 cents and then at 330.00 cents. First support is seen at last week’s low of 322.30 cents and then at 320.00 cents. Wyckoff's Market Rating: 5.0.

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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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