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 Sees Price Pressure from Profit Taking, Powerful Greenback

Monday January 26, 2015 2:08 PM

(Kitco News) - Gold prices ended the U.S. day session moderately lower Monday, on profit-taking from recent gains that saw prices last week hit a 5.5-month high, and on a strong U.S. dollar index that notched a 12-year high Monday. February Comex gold was last down $13.40 at $1,279.30 an ounce. Spot gold was last down $14.80 at $1,279.75. March Comex silver last traded down $0.345 at $19.955 an ounce.

The featured element in the market place Monday was news the Greek anti-austerity party won elections by a wider-than-expected margin Sunday. The Syriza party’s victory raises more concerns about the viability of the European Union, longer-term. A main question is how long will the Germans put up with other EU countries that can’t get their own financial/economic house in order? This summer Greece will need another big infusion of funding from the EU, to stay solvent. Gold prices had rallied last week, in anticipation of such an outcome. However, the classic “buy the rumor, sell the fact” trading maxim proved correct today.

World markets took the news from Greece fairly well, which was also a negative for safe-haven gold. European stocks were mixed, while U.S. stock indexes were firmer in afternoon trading. The Greek news was partially offset by an upbeat German Ifo business confidence index reading Monday that came in at 106.7 in January from 105.5 in December. The data suggests the German economy is on the upswing.

Focus on Greece will not last long as other important matters are on the horizon, including the regular meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC), which begins on Tuesday and ends Wednesday afternoon. Traders will look for clues coming from that meeting, regarding when the U.S. central bank will begin to raise interest rates. Recent developments, including plunging crude oil prices, have led many to believe the Fed might not raise interest rates until late this year, or may have to wait until 2016.

The Chinese currency, the yuan, fell to a multi-month low Monday, as China’s central bank weighs monetary stimulus measures to jumpstart its flagging economy. The Russian ruble faced more downside pressure against world currencies Monday, following weekend fighting in Ukraine and the threats of more sanctions against Russia coming from the U.S. and European Union. The U.S. dollar index pushed to another 11-year high Monday, on safe-haven demand for U.S. dollar-backed assets.

Nymex crude oil prices slumped to nearly six-year low overnight. Nearby crude oil futures dropped below $45.00 a barrel as the steep downdraft in prices continues.

U.S. economic data out Monday was light and included the Texas manufacturing survey.

Trading volumes could be lighter Tuesday and Wednesday, as New York City is set to get hit by potentially one of the biggest blizzards on record.

The London P.M. gold fixing is $1,281.25 versus the previous A.M. fixing of $1,282.75.

Technically, February gold futures prices closed nearer the session low on profit taking from recent gains. Prices last week hit a 5.5-month high. The gold bulls still have the near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Their next upside near-term price breakout objective is to produce a close above solid technical resistance at the August 2014 high of $1,323.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,256.20. First resistance is seen at $1,290.00 and then at $1,300.00. First support is seen at today’s low of $1,275.60 and then at last week’s low of $1,272.10. Wyckoff’s Market Rating: 6.0

March silver futures prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart today. Profit taking was featured. Silver bulls still have the near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $19.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.355. First resistance is seen at $18.25 and then at last week’s high of $18.505. Next support is seen at today’s low of $17.865 and then at last week’s low of $17.63. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed up 450 points at 254.65 cents today. Prices closed near the session high today and saw short covering in a bear market. Prices hit a contract and multi-year low in early trading today. While the copper market bears still have the solid overall near-term technical advantage and prices are in a six-month-old downtrend on the daily bar chart, good follow-through buying Tuesday or Wednesday would produce a bullish double-bottom reversal on the daily bar chart, that would suggest a market low is in place. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support today’s contract low of 241.90 cents. First resistance is seen at today’s high of 255.45 cents and then at 258.55 cents. First support is seen at 252.00 cents and then at 250.00 cents. Wyckoff's Market Rating: 2.0.

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