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P.M. Kitco Roundup: Comex Gold Rebounds on Bargain Hunting, Short Covering

Wednesday September 25, 2013 2:15 PM

(Kitco News) - Comex gold futures prices put on a late-morning surge and held those gains into the close Wednesday, to finish solidly higher in the day. The market saw more short-covering, bargain hunting and a technically related bounce following recent selling pressure. December Comex gold was last up $19.00 at $1,335.30 an ounce. Spot gold was last quoted up $12.30 at $1335.75. December Comex silver last traded up $0.274 at $21.860 an ounce.

Silver futures prices showed little to no reaction to news Wednesday around midday that the U.S. government (Commodity Futures Trading Commission) closed its years-long probe into manipulation of the silver futures market, saying it had no hard evidence that such had occurred.

U.S. economic data Wednesday was slightly on the stronger side of expectations, with the advance report on durable goods up slightly, and new residential home sales at a multi-month high. Recent U.S. economic data has been a mixed bag, with some reports showing modest growth and others suggesting continued stagnation. The recent ambiguous U.S. data tilts in favor of the Federal Reserve continuing its monthly bond-buying program (quantitative easing) for at least a while longer.

The U.S. budget and debt ceiling issues are moving to the front burner of the market place. The U.S. government will have to at least partially shut down at the end of this month if it does not pass a budget. Also, in mid-October the U.S. will hit its borrowing limit. There has already been harsh rhetoric from both political parties on the matters. A U.S. senator has already filibustered on the U.S. budget. This matter could be significantly bearish for most markets in the coming weeks, as there is already talk some of the U.S. government will shut down for a short time. The question for gold traders is whether the yellow metal would follow the raw commodity sector and sell off, or act like a safe-haven asset and rally, if the U.S. government shut down.

The London P.M. gold fix is $1,322.75 versus the previous P.M. fixing of $1,314.25.

Technically, December gold futures prices closed nearer the session high Wednesday. Bulls still have more work to do in the near term to suggest prices can begin to trend higher. A four-week-old downtrend is still in place on the daily bar chart. The gold market bears still have the slight 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 last week’s high of $1,375.40. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,291.50. First resistance is seen at Wednesday’s high of $1,338.30 and then at $1,350.00. First support is seen at $1,325.00 and then at Wednesday’s low of $1,316.60. Wyckoff’s Market Rating: 4.5

December silver futures prices closed nearer the session high on more short covering and bargain hunting Wednesday. Silver bears still have the overall near-term technical advantage. A four-week-old downtrend is still in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $23.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $21.225. First resistance is seen at this week’s high of $22.035 and then at $22.50. Next support is seen at Wednesday’s low of $21.49 and then at this week’s low of $21.30. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed up 125 points at 326.90 cents Wednesday. Prices closed near mid-range. 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 last week’s high of 335.95 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the September low of 319.05 cents. First resistance is seen at Wednesday’s high of 327.80 cents and then at 330.00 cents. First support is seen at Wednesday’s low of 325.30 cents and then at this week’s low of 323.55 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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