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P.M. Kitco Roundup: Gold Boosted on Safe-Haven Demand Amid Malaysia Airliner Crash Uncertainty
Thursday July 17, 2014 2:06 PM
(Kitco News) - Gold saw seeing keen safe-haven demand in the immediate aftermath of a Malaysian airliner with 295 people on board that crashed near the border of Ukraine and Russia. The uncertainty of the matter--whether it was shot down, terrorism, or mechanical malfunction or pilot error, spooked the market place. Reports said the jet quickly disappeared from radar screens and that there was a wide debris field on the ground, which the market place sees as very disconcerting. August Comex gold was last up $17.10 at $1,316.90 an ounce. Spot gold was last quoted up $16.70 at $1,317.00. December Comex silver last traded up $0.383 at $21.215 an ounce.
There were several unconfirmed reports that the Malaysian jetliner was shot down by mistake—by either the Ukraine or Russian military. The plane was flying over a war zone. The fact that gold did not post bigger gains and backed down from its earlier high suggests the biggest market impact of the incident has already occurred. However, this could change quickly if the present conjecture on what happened turns out to be wrong.
In overnight news, the U.S. and European Union have slapped new and tough sanctions on Russia. Russia reacted with bellicose rhetoric that has ratcheted up tensions between it and the West, regarding Russia’s annexation of part of Ukraine a few months ago. Asian and European stock markets were pressured a bit on this news.
There was still more downbeat economic data released from the European Union Thursday. The bloc reported its construction spending fell 1.5% from April to May, but was up 3.5% from a year ago. The EU also reported its annual inflation rate remained at a very low 0.5% in June. The very low inflation and weak economic numbers in the EU have prompted the European Central Bank to inject monetary policy stimulus this summer, and more easing is likely on the way in the coming weeks.
In other news, reports say India gold imports rose by 65% in June, on an annual basis, despite no movement by the Indian government to relax gold import duties.
U.S. economic data released Thursday included the weekly jobless claims report, new residential construction, and the Philadelphia Fed business survey. This data was collectively a bit downbeat, which also worked to modestly support the gold market.
The London P.M. gold fix was $1,302.50 versus the previous A.M. fixing of $1,302.75.
Technically, August gold futures prices closed nearer the session high today. Gold bulls and bears are now back on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,346.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at this week’s low of $1,292.60. First resistance is seen at Thursday’s high of $1,325.90 and then at $1,330.00. First support is seen at $1,310.00 and then at $1,300.00. Wyckoff’s Market Rating: 5.0
December silver futures prices closed nearer the session high Thursday on short covering and bargain hunting, and on the rally in gold prices. The bulls have quickly regained the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.67 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $20.70. First resistance is seen at Thursday’s high of $21.345 and then at $21.385. Next support is seen at $21.00 and then at Thursday’s low of $20.855. Wyckoff's Market Rating: 6.0.
December N.Y. copper closed up 35 points at 322.60 cents Thursday. Prices closed nearer the session high and hit a two-week low. Copper bulls still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 329.45 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 316.50 cents. First resistance is seen at 325.00 cents and then at 326.00 cents. First support is seen at Thursday’s low of 321.00 cents and then at 320.00 cents. Wyckoff's Market Rating: 6.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
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