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P.M. Kitco Metals Roundup: Gold Weaker on Mild Profit Taking, Chart Consolidation; FOMC a Non-Event
Wednesday January 28, 2015 2:20 PM
(Kitco News) - Gold prices ended the U.S. day session modestly lower Wednesday. Backing and filling on the charts and some minor profit taking were featured following the good gains posted Tuesday. The key “outside markets” were also in a bearish posture on this day, as the U.S. dollar index was higher and crude oil prices were lower. Gold showed very little reaction to the FOMC statement issued in the afternoon. February Comex gold was last down $3.70 at $1,288.00 an ounce. Spot gold was last down $3.20 at $1,289.40. March Comex silver last traded up $0.036 at $18.12 an ounce.
The major U.S. news of the week saw the Federal Reserve’s Open Market Committee leave U.S. monetary policy unchanged, saying the Fed remains “patient” on raising interest rates. The overall market place showed a muted reaction to the statement, as it was in line with market expectations. Recent developments, including plunging crude oil prices, economic troubles in the European Union, and other countries moving to stimulate their monetary policies, have led many to believe the Fed might not raise interest rates until late this year, or may have to wait until 2016.
Greece remains on the front burner of market place concerns. Such is limiting selling pressure on safe-haven gold. Following the weekend Greek anti-austerity Syriza party election victory, the new leftist Greek prime minister is already rolling back austerity measures that he claims have hampered the Greek population. The Greece stock market sold off and Greek bond yields soared on the development. Other European stock markets were also hurt on the news. The stage is set for a showdown between the bold young Greek prime minister and the European Union, which has bank-rolled Greece during its economic woes the past few years. One has to wonder how defiant the Greek prime minister will be when Greece is due to obtain more loans from the EU this summer.
In other overnight news, Asian currency markets were roiled Wednesday following the surprise move by Singapore’s central bank to ease the city-state’s monetary policy. The move was the latest effort by Asian countries to deflate their currencies. The unsettling currency developments recently are also a positive for gold.
The London P.M. gold fixing is $1,288.00 versus the previous A.M. fixing of $1,287.00.
Technically, February gold futures prices closed nearer the session low on some mild profit taking and chart consolidation. The gold bulls still have the near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. A bull flag pattern has also formed on the daily chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,307.80. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,256.20. First resistance is seen at today’s high of $1,293.30 and then at $1,300.00. First support is seen at today’s low of $1,282.70 and then at this week’s low of $1,272.00. Wyckoff’s Market Rating: 6.0
March silver futures closed up $0.016 at $18.105 today. Prices closed near the session high. Bearish outside markets today—lower crude oil and a firmer U.S. dollar index—were bearish for silver. Silver bulls have the near-term technical advantage. Prices are in a 2.5-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 Tuesday’s high of $18.215 and then at last week’s high of $18.505. Next support is seen at today’s low of $17.945 and then at $17.63. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed up 65 points at 246.90 cents today. Prices closed nearer the session low today and saw tepid short covering in a bear market. The copper market bears have the solid overall near-term technical advantage. Prices are in a six-month-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 235.00 cents. First resistance is seen at today’s high of 250.00 cents and then at this week’s high of 255.45 cents. First support is seen at Tuesday’s low of 244.60 cents and then at the contract low of 241.90 cents. Wyckoff's Market Rating: 1.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
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