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P.M. Kitco Metals Roundup: Gold Pressured by Soaring U.S. Dollar Index; U.S. Jobs Data Next Up

Thursday September 4, 2014 2:08 PM

(Kitco News) - Gold prices ended the U.S. day session moderately lower Thursday. The yellow metal saw selling pressure develop during the session as the U.S. dollar index pushed sharply higher and hit a 13-month high. The gold-bullish elements of the interest rate cut and quantitative easing announcement from the European Central Bank Thursday were offset by the surging greenback. December Comex gold was last down $4.00 at $1,266.30 an ounce. Spot gold was last quoted down $3.80 at $1,266.00. December Comex silver last traded down $0.074 at $19.115 an ounce.

The ECB lowered its key interest rate to very near zero, at .005%. The market place reckoned the ECB was on the verge of announcing fresh monetary stimulus. There was uncertainty on the precise timing of any such move. ECB president Mario Draghi’s press conference saw the modest quantitative easing package unveiled. The Euro currency sunk to a 13-month low on the ECB news.

Next up is the U.S. jobs report on Friday, which will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August. Recent improving U.S. economic data suggests the Federal Reserve will continue to wind down its quantitative easing of monetary policy by the end of this year, and will likely begin to raise interest rates sometime in 2015.

There was a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the ADP national employment report, the  Challenger job cuts report, revised productivity and costs, the international trade report, the U.S. services PMI, the ICSC chain store sales report, the DOE liquid energy stocks report, and the ISM non-manufacturing report. That data was a mixed bag but mostly upbeat.

On the geopolitical front there have been no major, markets-moving developments this week. The Russia-Ukraine stand-off continues to simmer, with a cease-fire maybe in place, but maybe not. The U.S. and U.K. continue to ratchet up their defensive postures against the ISIS terrorists in the Middle East.

The London P.M. gold fix was $1,271.50 versus the previous London A.M. fixing of $1,271.00.

Technically, December gold futures prices closed near the session low Thursday. Prices are hovering near this week’s 10-week low. Gold bears have the firm overall near-term technical advantage as a seven six-week-old downtrend is 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 $1,290.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at $1,275.00 and then at $1,280.00. First support is seen at this week’s low of $1,261.90 and then at $1,250.00. Wyckoff’s Market Rating: 3.0

December silver futures prices closed nearer the session low and hit a two-month low Thursday. Prices also scored a bearish “outside day” down on the daily bar chart. A seven-week-old downtrend is in place on the daily bar chart. The bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $19.75 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 Thursday’s high of $19.39 and then at this week’s high of $19.565. Next support is seen at Thursday’s low of $19.09 and then at $19.00. Wyckoff's Market Rating: 2.0.

December N.Y. copper closed up 260 points at 315.30 cents Thursday. Prices closed near mid-range. Copper bears have the slight overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week’s high of 324.60 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 310.20 cents. First resistance is seen at Thursday’s high of 317.30 cents and then at 319.00 cents. First support is seen at this week’s low of 312.55 cents and then at 311.00 cents. Wyckoff's Market Rating: 4.5.

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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