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P.M. Kitco Roundup: Gold Ends Steady-Weak; Selling Interest Limited by Geopolitics
Wednesday July 23, 2014 2:15 PM
(Kitco News) - Gold prices ended the U.S. day session steady to slightly lower in quieter trading Wednesday. Less risk aversion in the market place at mid-week is a bit bearish for safe-haven gold. However, the geopolitical events recently are still keeping sellers of gold leery. August Comex gold was last down $0.90 at $1,305.40 an ounce. Spot gold was last quoted down $2.80 at $1,305.25. December Comex silver last traded down $0.012 at $21.054 an ounce.
The market place Wednesday showed a muted reaction to reports that two Ukrainian military jets were shot down by Russian rebels. Still, there is a bit more investor and trader risk appetite in the market place at mid-week. But the Russia-Ukraine crisis and the Israel-Hamas fighting remain on the front burner of the market place. Many veteran market watchers are surprised there has not been greater risk aversion in the market place amid the heightened geopolitical tensions the past week, or even the past few months. One explanation could be that the industrialized world is so awash in cash following the major central banks of the world pumping monies into the world financial system the past few years. In other words, there’s more money in the world to be thrown at many markets. That certainly appears to be the case in the major world stock indexes, which are hovering near record or multi-year highs. The above postulation also suggests serious price inflation should occur at some point down the road. However, at present there is more concern about deflation, especially in the European Union.
Gold, U.S. Treasuries and the U.S. dollar are safe-haven assets that have been and likely will continue to be supported from the heightened world tensions. I suspect that for the near term, trading action in many markets will day to day swing from risk-on to risk-off, depending on the news headlines of that day.
Traders and investors are looking forward to the next piece of economic data coming out of China—preliminary manufacturing data on Thursday.
U.S. economic data released Wednesday was light and included the weekly mortgage applications survey and the weekly DOE liquid energy stocks report.
The London P.M. gold fix was $1,308.00 versus the previous A.M. fixing of $1,307.50.
Technically, August gold futures closed nearer the session low Wednesday. Gold bulls and bears are 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 the July low of $1,292.60. First resistance is seen at Wednesday’s high of $1,311.80 and then at Tuesday’s high of $1,316.80. First support is seen at this week’s low of $1,302.20 and then at $1,300.00. Wyckoff’s Market Rating: 5.0
December silver futures prices closed near mid-range Wednesday. The bulls have the slight near-term technical advantage amid recent choppy trading. 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 the July low of $20.70. First resistance is seen at this week’s high of $21.21 and then at $21.37. Next support is seen at this week’s low of $20.86 and then at $20.70. Wyckoff's Market Rating: 5.5.
December N.Y. copper closed up 20 points at 321.85 cents Wednesday. Prices closed nearer the session high and saw mild short covering. Copper bulls have the slight near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 329.45 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of 317.55 cents. First resistance is seen at Wednesday’s high of 322.50 cents and then at this week’s high of 324.25 cents. First support is seen at Wednesday’s low of 320.10 cents and then at this week’s low of 318.20 cents. Wyckoff's Market Rating: 5.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
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