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P.M. Kitco Metals Roundup: Gold Down, Sinks to 3.5-Month Low, as U.S. Dollar Powers Still Higher
Wednesday March 11, 2015 1:24 PM
(Kitco News) - Gold prices were moderately lower and hit a fresh 3.5-month low during U.S. trading Wednesday. The very strong rally in the U.S. dollar index continues to cast a bearish pall over the precious metals markets. April Comex gold was last down $10.50 at $1,149.60 an ounce. May Comex silver was last down $0.293 at $15.34 an ounce.
The feature in the market place this week is the soaring U.S. dollar and plunging Euro currency. The U.S. dollar index hit a 12-year high Wednesday, while the Euro sunk to a 12-year low. The Euro is drawing close to parity with the greenback. The specter of U.S. Federal Reserve monetary policy tightening in the coming months and this week’s monetary policy easing from the European Central Bank are driving those two currencies in different directions. The velocity of the price moves in the two currencies recently is unsettling for traders and investors, and that uncertainty is credited in part with pushing the U.S. stock market sharply lower Tuesday. Trader and investor anxiety in the market place this week has only somewhat limited selling interest in safe-haven gold.
German 10-year bond yields hit a record low of 0.2% Wednesday. The shorter-term two-year Schatz was auctioned for a record low -.024%. Other Eurozone countries’ bond yields are also at or near record lows. The German bond yields at record lows is mainly due to safe-haven demand from European investors, while the other EU country bond yields falling is due to the European Central Bank’s plans to buy sovereign bonds as part of its quantitative easing of its monetary policy.
There was more perceived downbeat economic data coming out of China Wednesday. That country’s industrial production in the first two months of 2015 was up 6.8% from last year. Retail sales in the same period were up 10.7%. Those numbers are hefty by other nations’ standards, but did not meet market expectations for even better numbers. Many expect China’s central bank to announce further monetary policy stimulus measures in the coming months.
The Bank of Thailand made a surprise move to cut its interest rates Wednesday, in the latest of several central bank moves to deflate their currencies and stimulate their economies.
The London P.M. gold fixing is $1,150.00 versus the previous A.M. fixing of $1,158.75.
Technically, April gold futures bears have the solid overall near-term technical advantage as a seven-week-old downtrend line is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,174.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the December low of $1,143.40. First resistance is seen at Wednesday’s high of $1,164.30 and then at Tuesday’s high of $1,169.60. First support is seen at Wednesday’s low of $1,146.50 and then at $1,143.40. Wyckoff’s Market Rating: 1.5
May silver futures bears have the solid overall near-term technical advantage as prices hit a 3.5-month low Wednesday. Prices are in a seven-week-old downtrend. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at $15.50 and then at today’s high of $15.73. Next support is at today’s low of $15.26 and then at $15.00. Wyckoff’s Market Rating: 1.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
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