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A.M. Kitco Metals Roundup: Gold Near Steady; No Upside Traction Despite Sharply Lower U.S. Dollar Index

Friday December 27, 2013 8:16 AM

(Kitco News) - Gold prices are trading near unchanged levels in early U.S. trading Friday. The gold and silver bulls are disappointed their metals have received no upside price push from a sharply lower U.S. dollar index Friday morning. It’s still a quieter, holiday atmosphere as many traders and investors are still absent. The gold and silver market bears remain in firm technical command. February gold was last down $1.70 at $1,210.40 an ounce. Spot gold was last quoted down $0.30 at $1211.25. March Comex silver last traded down $0.051 at $19.865 an ounce.

The feature in the market place overnight is a slumping U.S. dollar index, which is sharply lower and poised to close at a seven-week low close Friday, amid no apparent new fundamental development behind the strong price move.

China’s stock market rose overnight on easing concerns about higher short-term interest rates in China. Japan’s Nikkei index saw some profit taking after hitting a six-year high earlier this week.

Otherwise, it was mostly quiet in the markets overnight, amid the holiday season. Look for generally thin volumes and lackluster trading conditions Friday and for most of next week.

The geopolitical situation worldwide remains relatively calm. That condition is not likely to persist and one has to wonder where and when the next flare-up will occur.

The U.S. economic calendar is light Friday and includes the weekly DOE energy stocks report.

Wyckoff’s Daily Risk Rating: 5.0 (No major headline risk today, as holidays are keeping many traders and investors away and making trading volumes thin.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fix is $1,209.25 versus the P.M. fixing of $1,199.00.

Technically, February gold futures bears have the solid overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at last week’s high of $1,251.70. Bears' next near-term downside breakout price objective is closing prices below technical support at the 2013 low of $1,187.90. First resistance is seen at this week’s high of $1,215.40 and then at $1,225.00. First support is seen at $1,200.00 and then at this week’s low of $1,191.80.  

March silver futures bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $20.48 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $18.89. First resistance is seen at this week’s high of $20.03 and then at $20.295. Next support is seen at the overnight low of $19.75 and then at $19.50.

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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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