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A.M. Kitco Metals Roundup: Gold Firmer On Short Covering, Bargain Hunting

Monday March 10, 2014 8:14 AM

(Kitco News) - Gold prices are trading just above unchanged in early U.S. dealings Monday, supported on short covering by the shorter-term traders and on some bargain hunting following Friday’s losses. April gold was last up $1.80 at $1,340.00 an ounce. Spot gold was last quoted up $0.50 at $1,340.50. May Comex silver last traded down $0.107 at $20.79 an ounce.

There was downbeat economic data coming out of China over the weekend. Its exports fell by 18% in February, year-on-year, it was reported Saturday. A 5% increase in exports was expected from the world’s second-largest economy in February. China’s trade deficit in February was $23 billion, compared to a $32 billion surplus in January. This surprising news put pressure on Asian and European stock markets, as well as the raw commodity sector, to start the trading week.

The Malaysian airliner that went missing over the weekend is not being credited with significantly moving markets, but the specter of terrorism being at blame is unsettling.

The situation in Ukraine is simmering somewhere between the front burner and back burner of the market place, at present. Russian president Putin did turn up the heat a bit over the weekend when he said he would back the Crimean region seceding from Ukraine. U.S. and German officials rebuked Putin over the weekend. A vote on the Crimean secession is scheduled for March 16, and that could be the next flashpoint in the region.

U.S. economic data due for release Monday is light and includes the employment trends index.

Wyckoff’s Daily Risk Rating: 6.0 (The Ukraine situation has de-escalated but has not gone away.)

(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 $1,334.25 versus the P.M. fixing of $1,335.25.

Technically, April gold futures prices are still in a 2.5-month-old uptrend on the daily bar chart. The gold bulls have the near-term technical advantage, but need to show more power soon to keep it. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at last week’s high of $1,355.00. Bears' next near-term downside breakout price objective is closing prices below technical support at $1,318.70. First resistance is seen at the February high of $1,345.60 and then at $1,350.00. First support is seen at $1,330.00 and then at last week’s low of $1,326.60.  

May silver futures bears have the slight near-term technical advantage as prices fell to a fresh four-week low overnight. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 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 $21.25 and then at $21.50. Next support is seen at last week’s low of $20.755 and then at Monday’s low of $20.61.

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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