EDITOR'S NOTE: Don't Miss a Beat! Sign-up for the Kitco News Weekly Roundup– our newsletter highlighting our most popular features, articles and videos! Register Here

P.M. Kitco Metals Roundup: Gold Posts Modest Gains on More Safe-Haven Demand and Chart-Based Buying

Wednesday January 14, 2015 1:54 AM

(Kitco News) - Gold prices ended the U.S. day session modestly higher and closed at an 11-week high close Wednesday. A downbeat U.S. economic report and a stock market sell-off prompted safe-haven buying interest in gold. A weaker U.S. dollar index on this day was also friendly for the precious metals bulls. February Comex gold was last up $2.40 at $1,236.80 an ounce. Spot gold was last up $5.70 at $1,237.00. March Comex silver last traded down $0.151 at $17.005 an ounce.

U.S. advance retail sales were reported Wednesday morning and came in at down 0.9% in December. That “miss” to the downside boosted gold prices, U.S. Treasury prices and pressured the U.S. stock indexes. Retail sales were expected to have risen by 0.1% in December. The data also raises the odds that the U.S. Federal Reserve may not raise interest rates as soon as it had hoped.

Another U.S. Federal Reserve official said Tuesday it would be a bad idea for the Fed to raise interest rates in 2015. Minneapolis Fed president Narayana Kocherlakota said a U.S. rate hike would impede the U.S. jobs market recovery.

European stock markets were also under pressure Wednesday, amid a general “risk-off” trader and investor mentality, due to world economic growth worries. Late Tuesday the World Bank released its global economic outlook and said overall world growth would be 3% this year, up from 2.6% in 2014. However, the World Bank cut its 2015 forecast, which had earlier called for 3.4% world economic growth.

European stock markets were also pressured by a court ruling that ostensibly approved the quantitative easing move the European Central Bank will likely announce soon. However, selling pressure in European stocks was limited by an upbeat report on Euro zone industrial output released Wednesday.

In another worrisome development on the deflation front, copper prices fell to a 5.5-year low Wednesday. Copper futures prices this week have plunged. The fact this major industrial metal is in a free fall, along with crude oil prices, does not at all bode well for the raw commodity sector bulls—at least for the near term. Grain futures prices are also eroding this week. Yet, gold is holding its own, which is another bullish clue for the metal.

Crude oil prices traded near steady Wednesday, after falling to a nearly six-year low on Tuesday, at $44.20 a barrel basis February Nymex futures. The downdraft in crude oil has been unsettling to much of the market place, including the stock markets. The other key “outside market” on Wednesday finds the U.S. dollar index lower but still not far below last week’s 10-year high.

The next major data point coming into focus for traders and investors is the January 22 meeting of the European Central Bank. The specter of price deflation and rhetoric coming from ECB officials suggest the central bank will soon initiate monetary stimulus in the forming of quantitative easing.

The London P.M. gold fix is $1,235.00 versus the previous A.M. fixing of $1,228.75.

Technically, February gold futures prices closed nearer the session high and closed at an 11-week high close today. The gold bulls have upside momentum and have the slight near-term technical advantage. Bulls are working on establishing a near-term price uptrend. Their next upside near-term price breakout objective is to produce a close above solid technical resistance at the October high of $1,256.20. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,244.60 and then at $1,250.00. First support is seen at $1,230.00 and then at today’s low of $1,224.90. Wyckoff’s Market Rating: 5.5

March silver futures closed down $0.161 at $17.00 today. Prices closed nearer the session high and saw a corrective pullback from solid gains posted Tuesday. Prices Tuesday saw a bullish upside “breakout” from a choppy trading range on the daily bar chart. Silver bulls and bears are on a level near-term technical playing field. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $17.355 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at this week’s high of $17.215 and then at $17.355. Next support is seen at $16.74 and then at today’s low of $16.56. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed down 1,450 points at 249.90 cents today. Prices closed nearer the session low today and hit another contract and five-year low. The copper market is in a free-fall and bears have the strong overall near-term technical advantage. However, the market is short-term oversold and due for a corrective bounce very soon. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 275.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 225.00 cents. First resistance is seen at 255.00 cents and then at 260.00 cents. First support is seen at 245.00 cents and then at today’s contract low of 242.35 cents. Wyckoff's Market Rating: 1.0.

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.
kitco news

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart