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P.M. Kitco Roundup: Comex Gold Ends Lower, Spot Near Steady; Bears in Control

Thursday November 21, 2013 2:03 PM

(Kitco News) - Comex gold prices are ended the U.S. day session moderately lower Thursday, reflecting the additional losses that occurred after the futures market closed Wednesday. Meantime, spot gold prices are traded around steady to modestly higher on a corrective bounce from Wednesday’s strong selling pressure following the bearishly construed FOMC minutes that were released Wednesday afternoon. Gold prices fell to a 4.5-month low Thursday. February Comex gold was last down $14.90 at $1,244.00 an ounce. Spot gold was last quoted up $1.20 at $1244.50. March Comex silver last traded down $0.098 at $20.005 an ounce.

The U.S. Federal Reserve’s Open Market Committee minutes were deemed somewhat hawkish by the market place and that helped to sink the gold and silver markets. Several members of the committee said at their October meeting they could see the Fed tapering its $85 billion-a-month bond-buying program at “one of its next few meetings.”  The committee members also saw the U.S. economy growing at a “moderate” pace. However, there is still a large contingent of market watchers who said the latest FOMC minutes revealed not much new and said any Fed tapering move will first have to see better U.S. jobs data. This puts the U.S. employment report in early December very high on traders’ and investors’ watch lists.

It was reported Thursday that China’s HSBC preliminary manufacturing report for November came in at 50.4 versus the final reading of 50.9 in October. Any reading above 50.0 suggests economic growth. However, the market place took the China data as a bit downbeat. That was also a bit bearish for the raw commodity markets Thursday, including the precious metals.

In other overnight news, European Central Bank president Mario Draghi said the European Union has seen “disinflation” for several months. He said he does not expect deflation to grip the EU, but added the ECB needs to take measures to prevent deflation, such as the recent interest rate cut by the ECB. It’s my bias that the world’s central bankers are more worried about deflation setting in for a long period of time than they are presently letting on. This could mean the central banks will try to keep their stimulative monetary policies in place for as long as possible--and longer than the market place presently reckons.

The London P.M. gold fix is $1,240.00 versus the previous P.M. fixing of $1,257.00.

Technically, February gold futures prices closed near mid-range and hit a fresh more-than-four-month low Thursday. The gold market bears have the solid overall near-term technical advantage and have gained more downside momentum this week. Prices are in a four-week-old downtrend 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 $1,275.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,200.00. First resistance is seen at Thursday’s high of $1,250.50 and then at $1,254.00. First support is seen at Thursday’s low of $1,236.50 and then at $1,225.00. Wyckoff’s Market Rating: 2.5

March silver futures prices closed near mid-range and hit another fresh 3.5-month low Thursday. Silver bears have the solid overall near-term technical advantage and have gained fresh downside momentum this week. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of $19.30. First resistance is seen at Thursday’s high of $20.09 and then at $20.25. Next support is seen at Thursday’s low of $19.74 and then at $19.50. Wyckoff's Market Rating: 2.0.

March N.Y. copper closed up 320 points at 320.05 cents Thursday. Prices closed nearer the session high and scored a bullish “outside day” up on the daily bar chart. Short covering was featured. Bears still have the slight near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of 313.50 cents. First resistance is seen at Thursday’s high of 320.75 cents and then at 323.00 cents. First support is seen at 317.50 cents and then at Thursday’s low of 315.05 cents. Wyckoff's Market Rating: 4.5.

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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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