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A.M. Kitco Metals Roundup: Gold Near Steady, Pokes To 3-Week High Overnight

Monday January 6, 2013 8:22 AM

(Kitco News) - Gold prices are hovering near unchanged levels in early U.S. trading Monday, after notching a three-week high overnight. The gold and silver market bulls have gained some upside near-term technical momentum to start the new year, but have more work to do to suggest price uptrends can be sustained. February gold was last down $0.60 at $1,237.90 an ounce. Spot gold was last quoted up $0.90 at $1239.50. March Comex silver last traded down $0.146 at $20.065 an ounce.

For many traders and investors, this is their first day back at work after a long holiday break. Later this week the headline risk picks up, as the Federal Reserve’s FOMC minutes are out Wednesday afternoon, while the European Central Bank holds its monthly meeting on Thursday and the U.S. employment report is out on Friday. Volatility and volumes in the market place are likely to pick up as the week progresses.

There is also important economic data coming out of China later this week, including trade and inflation reports. Last week, a disappointing purchasing managers index in China was reported, which has helped to sink the Chinese stock market the past few sessions. The spike in short-term Chinese interest rates in late December is still on traders’ minds. China remains an increasingly important cog in the collective world economy.

U.S. economic data due for release Monday includes manufacturers’ shipments and orders, the ISM non-manufacturing report, and the global services purchasing managers index.

Wyckoff’s Daily Risk Rating: 5.0 (No major headline risk today, but the heat will be turned up as the week progresses.)

(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 $1,238.00 versus the P.M. fixing of $1,234.50.

Technically, February gold futures bears still have the overall near-term technical advantage, but prices did hit a three-week high overnight. It appears the bears became exhausted after pushing prices to a seven-month low last week. The gold bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at the December high of $1,267.50. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,181.40. First resistance is seen at the overnight high of $1,245.70 and then at $1,250.00. First support is seen at the overnight low of $1,232.20 and then at $1,225.00.  

March silver futures bears still have the overall near-term technical advantage. However, prices have been trading sideways at lower levels for the past month, which could be some “basing” action that could put in a market low. 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 last week’s low of $18.72. First resistance is seen at last week’s high of $20.44 and then at $20.48. Next support is seen at the overnight low of $19.95 and then at $19.75.

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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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