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P.M. Kitco Roundup: Gold Ends Up, at 3-Month High, as Bulls Have Near-Term Technical Advantage

Wednesday February 12, 2014 2:12 PM

(Kitco News) - Gold prices ended the U.S. day session modestly higher and hit another three-month high Wednesday. Prices are trending higher on the daily chart and the bulls are enjoying the near-term technical advantage for the first time in months. April gold was last up $4.20 at $1,294.00 an ounce. Spot gold was last quoted up $3.30 at $1,294.75. March Comex silver last traded up $0.167 at $20.32 an ounce.

Traders and investors on Wednesday were still buzzing about U.S. Federal Reserve Chair Janet Yellen’s inaugural testimony on monetary policy to the Congress Tuesday. The market place’s “take-away” from Yellen’s comments is that she appears to be following closely in the footsteps of former Fed chairman Ben Bernanke, which is not surprising and does favor the dovish monetary policy camp. Yellen’s remarks were deemed friendly for the gold market and other raw commodity markets, as well as the U.S. stock market. Gold and silver saw some spillover support Wednesday from the Yellen remarks Tuesday.

In overnight news, there was upbeat economic data coming out of China, as its exports were reported up 10.6% in January, year-on-year. This was much higher than the 0.1% rise that was forecast. China imports were also reported up 10% in January, year-on-year—also well above market expectations. This news coming out of the world’s second-largest economy was also a bullish underlying factor for the raw commodity sector, including the precious metals.

Risk appetite in the market place has ticked up a bit following news Tuesday the U.S. government said it will ostensibly raise its debt ceiling without a nasty fight among Democrats and Republicans, which had been the case in recent years.

The emerging currency markets have been quiet the past couple weeks, after a rocky start to the new year. Fed Chair Yellen’s perceived dovish monetary policy ideas are somewhat of a salve for the secondary currencies. I would be surprised, however, if this matter has just gone away for good.

The London P.M. gold fix is $1,289.50 versus the P.M. fixing of $1,282.00.

Technically,  April gold futures prices closed nearer the session high and hit a more-than three-month high again Wednesday. A six-week-old uptrend is in place on the daily bar chart. Bulls have good upside near-term technical momentum and now have the slight near-term technical advantage for the first time in months. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at Wednesday’s high of $1,296.40 and then at $1,300.00. First support is seen at Wednesday’s low of $1,283.90 and then at $1,273.50. Wyckoff’s Market Rating: 5.5

March silver futures prices closed nearer the session high and hit a fresh three-week high Wednesday. More short covering was featured. Silver bears still have the overall near-term technical advantage, but the bulls have gained some fresh upside momentum. Prices continue to trade in a choppy and sideways range at lower price levels, which could be some “basing” action that eventually kicks off a price uptrend. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $20.67 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the January low of $18.97. First resistance is seen at $20.48 and then at $20.67. Next support is seen at Wednesday’s low of $20.08 and then at this week’s low of $19.915. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed up 440 points at 325.95 cents Wednesday. Prices closed nearer the session high and saw more short covering in a bear market. Copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 330.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of 317.50 cents. First resistance is seen at Wednesday’s high of 326.35 cents and then at 327.50 cents. First support is seen at 324.00 cents and then at Wednesday’s low of 322.15 cents. Wyckoff's Market Rating: 3.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter at @jimwyckoff

 

 

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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