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P.M. Kitco Roundup: Gold Ends Weaker Amid Bearish "Outside Markets;" U.S. Data Awaited

Tuesday July 29, 2014 2:05 PM

(Kitco News) - Gold prices ended a choppy, two-sided trading session modestly lower Tuesday. Some safe-haven demand was featured early on as there was a bit more risk aversion in the market place. However, prices sold off at mid-morning partly due to bearish outside market forces that included a stronger U.S. dollar index and lower crude oil prices. August Comex gold was last down $4.80 at $1,298.50 an ounce. Spot gold was last quoted down $4.90 at $1,299.00. December Comex silver last traded up $0.014 at $20.64 an ounce.

Looking at the intra-day chart for August gold futures, it appears a large sell order, or orders, hit the futures market at 9:40 a.m. eastern time. Then shortly thereafter prices sold off further following a much stronger-than-expected U.S. consumer confidence index reading for July.

There were geopolitical rumblings impacting trading Tuesday. The European Union and U.S. are slapping new sanctions on Russia. Meantime, the Israel-Hamas conflict appears not to be de-escalating. These matters helped to pressure world stock markets overnight, although the U.S. stock indexes had posted modest recoveries in afternoon trading Tuesday. The German 10-year bund yield fell to a record low Tuesday, on safe-haven moves by investors and traders. Meantime, U.S. Treasury bond prices posted a contract high and the U.S. dollar index hit a 5.5-month high Tuesday.

The market place is also focused on the big slate of U.S. economic data on tap this week. The headliners include the Federal Reserve’s Open Market Committee (FOMC) meeting on Tuesday and Wednesday, and the key U.S. employment report on Friday. The U.S. second-quarter GDP report is also out on Wednesday.  It’s likely the aforementioned reports will have a significant price impact on many markets, in the immediate aftermath of their release times.

The London P.M. gold fix was $1,299.25 versus the previous A.M. fixing of $1,307.50.

Technically, August gold futures prices closed nearer the session low Tuesday and scored a bearish “outside day” down on the daily bar chart. Gold bears now have the slight near-term technical advantage. A three-week-old downtrend line is still in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,325.90. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,287.50. First resistance is seen at Tuesday’s high of $1,312.10 and then $1,320.00. First support is seen at Tuesday’s low of $1,295.50 and then at $1,287.50. Wyckoff’s Market Rating: 4.5

December silver futures prices closed nearer the session low Tuesday. Prices are in a three-week-old downtrend on the daily bar chart. The bears have the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $21.21 an ounce. The next downside price breakout objective for the bears is closing prices below major support at $20.00. First resistance is seen at $20.80 and then at Tuesday’s high of $29.91. Next support is seen at Tuesday’s low of $20.585 and then at last week’s low of $20.42. Wyckoff's Market Rating: 4.5.

December N.Y. copper closed down 245 points at 322.90 cents Tuesday. Prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart. Copper bulls have the slight overall 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 the July low of 317.55 cents. First resistance is seen at 325.00 cents and then at Tuesday’s high of 326.40 cents. First support is seen at Tuesday’s low of 322.45 cents and then at 321.00 cents. Wyckoff's Market Rating: 5.5.

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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