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A.M. Kitco Metals Roundup: Gold Weaker Amid Lack Of Fresh Bullish News

Tuesday February 3, 2015 8:23 AM

(Kitco News) - Gold prices are again modestly lower in early U.S. trading Tuesday. No new, bullish fundamental developments have allowed the sellers to gain the upper hand in the safe-haven gold market so far this week. Some technical backing and filling on the daily charts is also featured in gold and silver markets this week. April Comex gold was last down $5.30 at $1,271.70 an ounce. March Comex silver last traded up $0.084 at $17.33 an ounce.

European stock markets rallied Tuesday on reports the new Greek government will come to terms with the European Union on dealing with Greece’s large amount of government debt, and new financing. The reports also said the new Greek prime minister is taking a more conciliatory tone regarding his anti-austerity rhetoric seen just after the election in late January. An EU official said Tuesday there may be some “wiggle room” regarding the EU accommodating Greece’s new proposals. The gold market also saw slight selling pressure on this news. But many market watchers are skeptical of this development, saying “the devil is in the details.”

Australia’s central bank on Tuesday is the latest to cut its interest rates (to a record low) in an effort to devalue the Australian dollar and in turn try to invigorate the Australian economy. The Aussie dollar fell to a five-year low versus the U.S. dollar on the news. Over a dozen smaller-country central banks have recently lowered their interest rates, as the “currency wars” scenario continues to build. Only the U.S. and the U.K. central banks have interest rate hikes on their radar scopes. And with another OECD world inflation report out Tuesday showing a five-year low rate of around 1% world inflation annually, the U.S. and U.K. may have their rate-raising plans dashed, or at least delayed. Economists and analysts continue to debate the benefits and/or detriments of a stronger U.S. dollar against the other world currencies.

A feature in the market place just recently is the solid rebound in the crude oil market. Whether this is just an upside technical correction in a strong downtrend in prices, or it is a market bottom, has yet to be determined. However, there are now early technical signals the crude oil market has put in at least a near-term bottom. A close in crude oil prices this Friday that is at or near the weekly high would be a stronger technical clue the market has indeed put in a significant bottom. A bottom in the crude oil market would be bullish for gold, silver and most other raw commodity markets.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM New York report on business, manufacturers’ shipments and orders, domestic auto sales, and the IBD/TIPP economic optimism index.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Wyckoff’s Daily Risk Rating: 5.5 (Trader and investor market risk aversion is not keen at present, but there are elements in the world which can change that mindset in a hurry.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fixing is $1,274.25 versus the previous P.M. fixing of $1,272.50.

Technically, April gold futures bulls still have the slight overall near-term technical advantage but have faded and need to show fresh power soon. The gold bulls’ next upside ear-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,240.00. First resistance is seen at $1,275.00 and then at $1,280.00. First support is seen at Monday’s low of $1,266.50 and then at $1,257.00.

March silver futures bulls still have the slight overall near-term technical advantage but need to show more power soon to keep it. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $18.00 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 $17.50 and then at the overnight high of $17.75. Next support is the overnight low of $17.15 and then at Monday’s low of $16.995.

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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