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A.M. Kitco Metals Roundup: Gold Firmer As Technicals Still Bullish; Yellen On Deck

Thursday February 27, 2014 8:15 AM

(Kitco News) - Gold prices are steady to modestly higher in early dealings Thursday, on some more chart-based buying as the near-term technical picture for gold remains bullish. The market place is awaiting Thursday morning’s remarks from Federal Reserve Chair Janet Yellen to the U.S. Congress. April gold was last up $2.30 at $1,330.30 an ounce. Spot gold was last quoted steady at $1,330.25. March Comex silver last traded down $0.039 at $21.215 an ounce.

Yellen’s speech to the U.S. Senate Banking Committee will find traders and analysts parsing her words to see if Yellen reveals any clues regarding future monetary policy moves by the Federal Reserve, including the pace of the Fed’s “tapering” of its monthly bond-buying program. Yellen’s speech was originally scheduled for a couple weeks ago, but was postponed due to inclement weather.

The Chinese currency, the yuan, fell to a seven-month low against the U.S. dollar Thursday, as it appears the Chinese government is manipulating its yuan for world trade advantages and to punish currency speculators trading the yuan.

The crisis in Ukraine is still a worry to the market place. The country is on the verge of financial collapse and needs funding soon from outside sources. Also, gunmen took over the government offices in Crimea Thursday and raised a Russian flag. This comes as the Russian government has moved troops and armor closer to Ukraine. If this situation escalates it would put even more risk aversion into the world market place, which would likely be bullish for gold and U.S. Treasuries and bearish for equities.

In the Euro zone, economic sentiment data was upbeat Thursday and showed the bloc’s economic confidence at a 2.5-year high.

U.S. economic data due for release Thursday includes the weekly jobless claims report, durable goods orders, and the Kansas City Fed manufacturing survey.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine uncertainty and recent Thailand unrest are keeping some risk aversion in the market place.)

(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 $1,331.00 versus the P.M. fixing of $1,331.75.

Technically, April gold futures prices are still in a seven-week-old uptrend on the daily bar chart. Prices hit a four-month high Wednesday. The gold bulls still have the near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,360.00. Bears' next near-term downside breakout price objective is closing prices below technical support at $1,300.00. First resistance is seen at the overnight high of $1,334.00 and then at $1,340.00. First support is seen at Wednesday’s low of $1,322.30 and then at this week’s low of $1,318.70.  

March silver futures bulls have the slight overall near-term technical advantage, but are fading a bit and need to show fresh power soon to keep it. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $22.18 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.67. First resistance is seen at the overnight high of $21.48 and then at $21.75. Next support is seen at the overnight low of $20.985 and then at $20.67.

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.
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