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P.M. Kitco Metals Roundup: Gold Ends Weaker on Chart Consolidation, Swiss Poll; FOMC a Non-Event

Wednesday November 19, 2014 2:20 PM

(Kitco News) - Gold prices were trading moderately lower Wednesday afternoon, in a volatile trading session. Backing and filling on the charts was featured after recent gains that saw prices hit a three-week high Tuesday. February Comex gold was last down $2.80 at $1,195.00 an ounce. Spot gold was last down $3.20 at $1,194.75. March Comex silver last traded up $0.105 at $16.33 an ounce.

The big economic report of the day in the U.S. was the minutes of the latest meeting of the Federal Open Market Committee (FOMC), out in early afternoon. The minutes this time contained no elements that surprised the market place and markets moved little in the aftermath. Fed meetings and minutes of those meetings have been markets-movers the past many months.

A late-morning steep sell off in gold Wednesday coincided with a new poll showing the Swiss “Save Our Gold” initiative had only 38% of the voters in favor of the Swiss government increasing its gold holdings to 20% of its assets. The Swiss will vote on the measure on November 30. Gold prices quickly recovered most of those losses by midday.

In overnight news, the Bank of Japan announced it would keep its very easy monetary policy steady, despite a grim Japanese GDP report issued earlier in the week. The BOJ governor said the latest monetary policy easing moves implemented last month were the right path to take.

There was also more weak economic data coming out of the European Union Wednesday, as EU construction spending across the region declined 1.8% in September, year-on-year.

The themes in the market place continue to be the strong U.S. dollar against the other major currencies, weakening world economies (except the U.S.) and the specter of price deflation looming and becoming a serious worldwide economic ailment. These themes have been solidly bearish for the raw commodity sector as a major down cycle continues to play out in raw commodities. The bear markets in raw commodities and very low interest rates that make holding bonds unattractive have made the stock markets “the only game in town” for most investors. But keep this in mind: Just like the now mature down-cycle in raw commodities, the mature up-cycle in equities will reverse at some point down the road—and probably sooner that most expect.

The London P.M. gold fix was $1,196.00 versus the previous London A.M. fixing of $1,200.75.

Technically, February gold futures prices were near mid-range in afternoon trading. The market saw a corrective technical pullback today. Bears regained a bit of downside technical momentum today and do have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,225.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,160.00. First resistance is seen at $1,200.00 and then at this week’s high of $1,204.70. First support is seen at today’s low of $1,174.70 and then at $1,170.00. Wyckoff’s Market Rating: 2.5

March silver futures prices closed near mid-range and did hit a three-week high early on today. The silver bears still have the overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $15.085. First resistance is seen at today’s high of $16.575 and then at $16.715. Next support is seen at today’s low of $15.93 and then at $15.75. Wyckoff's Market Rating: 2.0.

March N.Y. copper closed up 300 points at 302.20 cents today. Prices closed nearer the session high today on short covering in a bear market. The bears still have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the October high of 310.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the October low of 295.00 cents. First resistance is seen at today’s high of 303.60 cents and then at this week’s high of 305.05 cents. First support is seen at 300.00 cents and then at last week’s low of 297.70 cents. Wyckoff's Market Rating: 2.5.

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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