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P.M. Kitco Metals Roundup: Gold Posts Sharp Gains on Safe-Haven Demand, Short Covering

Wednesday August 6, 2014 2:21 PM

(Kitco News) - Gold prices ended the U.S. day session solidly higher and closed above the key $1,300.00 level Wednesday. The yellow metal was boosted by safe-haven demand and short covering on renewed geopolitical concerns. December Comex gold was last up $23.70 at $1,307.70 an ounce. Spot gold was last quoted up $20.30 at $1,309.50. December Comex silver last traded up $0.221 at $20.12 an ounce.

There is renewed attention on the Russia-Ukraine crisis at mid-week. Reports said Russian president Putin is getting ready to retaliate with its own sanctions against the West after his country has been slapped with economic sanctions recently. There were reports Tuesday afternoon that Russian troops were massing on the Ukraine border. Even though that news was not fresh, it was partly credited with sinking the U.S. stock market Tuesday afternoon.

The feature in the market place early Wednesday was the sell-off in world stock markets, following the U.S. lead Tuesday afternoon, as investors and traders exhibited keener “risk-off” attitudes. However, by afternoon trading Wednesday the U.S. stock indexes had pared their early losses.

In other news Wednesday, the yield on the German five-year bond (the Bobl) dropped to a record low Wednesday, at 0.28%, down from 0.33% last month. The record-low German bond yield is another clue of the heightened risk aversion presently in the market place.

Italy’s GDP was reported down 0.2% in the second quarter from the first, and down 0.3% year-on-year. This means Italy’s economy has slipped back into recession, which is another bearish clue for the collective European Union economy.

The London P.M. gold fix was $1,306.50 versus the previous A.M. fixing of $1,288.50.

Technically, December gold futures prices closed near the session high Wednesday. Gold bulls and bears are now back on a level near-term technical playing field. A four-week-old downtrend line on the daily bar chart was negated Wednesday. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,327.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,281.00. First resistance is seen at Wednesday’s high of $1,311.00 and then at $1,315.00. First support is seen at $1,300.00 and then at Wednesday’s low of $1,288.50. Wyckoff’s Market Rating: 5.0

December silver futures prices closed nearer the session high Wednesday on short covering. Prices Tuesday hit a six-week low. Silver prices are still in a four-week-old downtrend on the daily bar chart. The bears still have the near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $20.70 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.00. First resistance is seen at Wednesday’s high of $20.205 and then at $20.35. Next support is seen at $20.00 and then at this week’s low of $19.835. Wyckoff's Market Rating: 3.5.

December N.Y. copper closed down 400 points at 317.40 cents Wednesday. Prices closed nearer the session low and hit a five-week low. Copper bulls today lost their overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 310.00 cents. First resistance is seen at 320.00 cents and then at Wednesday’s high of 321.60 cents. First support is seen at Wednesday’s low of 316.60 cents and then at 315.00 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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