EDITOR'S NOTE: Catch the all new Kitco.com Market Data and Bitcoin sections!

P.M. Kitco Roundup: Gold Prices Weaker On Profit Taking; FOMC Minutes Uneventful

Wednesday February 19, 2014 2:22 PM

(Kitco News) - Gold prices ended the U.S. day session moderately lower Wednesday, on some more profit taking and a corrective technical pullback from recent gains that saw prices hit a 3.5-month high Tuesday. The gold and silver market bulls still have the near-term technical advantage. April gold was last down $7.10 at $1,317.50 an ounce. Spot gold was last quoted down $5.00 at $1,317.75. March Comex silver last traded down $0.163 at $21.735 an ounce.

Wednesday afternoon’s release of the minutes of the latest meeting of the Federal Reserve’s Open Market Committee (FOMC) revealed no major surprises. However, if pressed the market place might have pegged the minutes as just slightly more hawkish than expected—but nothing real significant. Given some recent weaker U.S. economic data, the market place paid extra close attention to the FOMC minutes, to try to better discern the tenor of the committee regarding its future monetary policy intentions. Two Federal Reserve officials on Wednesday said it would take a significant change in FOMC member attitudes to pull the tapering of the monthly bond-buying program off the table—even with some recent weaker U.S. economic data released.

Violence in Ukraine this week is getting major news coverage. If that situation escalates, which appeared to be the case Wednesday afternoon, more risk aversion could enter the market place to more directly impact markets. Such would likely prompt safe-haven investment demand for gold.

In other news Wednesday, the International Monetary Fund (IMF) released a report that said the Fund is worried about the emerging markets, given the recent turmoil with some emerging market currencies. The IMF warned about inflation in the emerging market countries and warned about deflation in the European Union—calling the potential EU deflation a new risk to the global economy.

It appears the raw commodity sector, in general, is waking up from a bearish slumber, as gold and silver markets hit 3.5-month highs this week. Platinum and palladium markets are also seeing uptrends develop on the daily charts. The copper market is also seeing a strong rebound from its February low. Part of the strength in the raw commodity sector just recently has been due to the fact the U.S. dollar index has slumped—hitting a five-week low on Wednesday. Many major raw commodities are priced in U.S. dollars on world markets. When the greenback slumps, it becomes cheaper to purchase those raw commodities with non-U.S. currencies. Another bullish input for raw commodities is the rallying Nymex crude oil futures market, which has recently pushed above $100.00 a barrel and this week hit a 5.5-month high. Indeed, it appears raw commodities have put in a major cycle low and that better times are ahead for those “hard assets.”

Technically, April gold futures closed nearer the session high Wednesday and saw profit taking after hitting a 3.5-month high on Tuesday. A seven-week-old uptrend is still in place on the daily bar chart. Bulls still have upside near-term technical momentum and have the 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 $1,360.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,280.00. First resistance is seen at today’s high of $1,323.00 and then at this week’s high of $1,332.40. First support is seen at this week’s low of $1,312.30 and then at $1,300.00. Wyckoff’s Market Rating: 6.0

March silver futures prices closed nearer the session high Wednesday. Mild profit taking was seen after prices Tuesday hit a more-than-three-month high. Recent price action has also seen a big and bullish upside “breakout” from a sideways trading range at lower price levels—which suggests a price uptrend can be sustained in silver. Silver bulls have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $22.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.00. First resistance is seen at this week’s high of $21.98 and then at $22.25. Next support is seen at Wednesday’s low of $21.62 and then at this week’s low of $21.315. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed down 5 points at 328.50 cents Wednesday. Prices closed nearer the session low on mild profit taking after hitting a three-week high Tuesday. Copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 336.00 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 330.20 cents and then at this week’s high of 332.00 cents. First support is seen at Wednesday’s low of 327.90 cents and then at this week’s low of 325.30 cents. Wyckoff's Market Rating: 5.0.

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

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart