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P.M. Kitco Metals Roundup: Gold Ends Near Steady; Rebound in U.S. Dollar Index Limits Gains

Thursday May 8, 2014 2:40 PM

(Kitco News) - Gold prices ended the U.S. day session near unchanged in quieter trading Thursday. Early gains that came from short covering and some bargain hunting were offset by a strengthening U.S. dollar index as the trading day progressed. June gold was last up $0.70 at $1,289.60 an ounce. Spot gold was last quoted down $0.10 at $1,290.25. July Comex silver last traded down $0.172 at $19.17 an ounce.

The U.S. dollar index Thursday hit a multi-month low but then made a strong rebound to trade higher on the day. When the greenback bounced the gold market saw some increased selling pressure surface. Still, the greenback continues in a near-term price downtrend on the daily chart. The dollar bears are still in technical control, which is a bullish underlying factor for most of the raw commodities, including precious metals.

The European Central Bank at its monthly monetary policy meeting made no change in ECB monetary policy, as expected. However, there is growing pressure on the ECB to implement further monetary policy stimulus measures, amid worries about price deflation in the European Union. The Euro currency is at a multi-week high against the U.S. dollar, and the strength of the common currency is also a concern to many European officials and another reason to EU interest rates. ECB President Mario Draghi said it his press conference following the ECB meeting that the bank could move to lower interest rates or inject more monetary policy stimulus at its meeting in June.

Fed Chair Janet Yellen spoke to the U.S. Congress again today, this time to a Senate committee. Her remarks were about the same as those she made Tuesday to the Joint Economic Committee of Congress. The take away from this week’s Yellen comments is that the U.S. economy is on the upswing, but don’t look for U.S. interest rates to rise any time soon due to a still-struggling housing sector.

The Russia-Ukraine tensions have not gone away, even though other market place matters have garnered the headlines this week. Traders and investors were somewhat assuaged Wednesday when reports said Russian President Vladimir Putin made comments that were deemed conciliatory. Gold and U.S. Treasuries have seen some safe-haven buying in recent weeks, amid the heightened Russia-Ukraine conflict. This matter is not going away soon and will likely see an escalation in tensions. This remains a bullish underlying factor for the gold market.

The London P.M. gold fixing today was $1,291.25 versus the previous P.M. fixing of $1,296.00.

Technically, June gold futures prices closed near mid-range Thursday. Gold bears still 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 this week’s high of $1,315.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,268.40. First resistance is seen at Thursday’s high of $1,295.50 and then at $1,300.00. First support is seen at Thursday’s low of $1,284.80 and then at $1,280.00. Wyckoff’s Market Rating: 4.0

July silver futures prices closed nearer the session low. The bears have the solid overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $19.77 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $18.685. First resistance is seen at Thursday’s high of $19.39 and then at $19.50. Next support is seen at Thursday’s low of $19.125 and then at $19.00. Wyckoff's Market Rating: 1.5.

July N.Y. copper closed up 280 points at 306.05 cents Thursday. Prices closed nearer the session high. Bulls and bears are on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 310.45 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at Thursday’s high of 306.95 cents and then at this week’s high of 308.20 cents. First support is seen at 305.00 cents and then at Thursday’s low of 302.75 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.
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