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P.M. Kitco Metals Roundup: Gold Up On Short Covering, Bargain Hunting, Safe-Haven Buying

Tuesday April 21, 2015 1:27 PM

(Kitco News) - Gold prices ended the U.S. day session moderately higher Tuesday, boosted on some short covering in the futures market and bargain hunting in the cash. There was also some safe-haven demand seen for gold amid mounting concerns over the Greece-EU debt impasse. June Comex gold was last up $8.30 at $1,202.00 an ounce. May Comex silver was last up $0.116 at $16.005 an ounce.

Greece remains a significant concern to the market place this week. Greek and International Monetary Fund/European Union officials debt restructuring talks continue but reports say not much progress is being made. Reports Monday said the Greek government ordered all state entities to move their cash reserves to the Greek central bank. This is a sign of a cash crunch in Greece. Greek bond yields have risen sharply recently and hit new record highs Tuesday, due to the doubts about Greece being able to pay its debts without serious economic reforms. The Greece-EU debt impasse is becoming a distress on world markets, but not yet a serious one. There are growing concerns in the market place that Greece will at some point default on its EU debt obligations. This matter will likely get worse before it gets better, in the eyes of traders and investors worldwide.

The U.S. dollar index weakened during the trading session Tuesday. That also worked in favor of the precious metals bulls on this day. The other key “outside market” saw crude oil prices lower. However, crude prices are still in a four-week-old uptrend on the daily bar chart and hovering not far below a four-month high scored last week.

Reports said Russia’s central bank purchased 1 million ounces of gold in April, which is the highest monthly total since early last fall. The total in reserves stands at 39.8 million ounces. The recent stabilization of the Russian ruble on the foreign exchange market allowed the Russian central bank to increase its gold sales this month.

The London P.M. gold fix is $1,195.30 versus the previous A.M. fixing of $1,197.70.

Technically, June gold futures prices closed near the session high. Gold bears still have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the April high of $1,224.50. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,178.20. First resistance is seen at last week’s high of $1,209.30 and then at $1,220.00. First support is seen at Monday’s low of $1,190.80 and then at last week’s low of $1,183.50. Wyckoff’s Market Rating: 3.0

May silver futures prices closed near mid-range and saw short covering in a bear market after prices Monday hit a four-week low. Silver bears still have the firm near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $15.26. First resistance is seen at today’s high of $16.165 and then at Monday’s high of $16.34. Next support is seen at Monday’s low of $15.82 and then at $15.50. Wyckoff's Market Rating: 2.5.

May N.Y. copper closed down 320 points at 270.05 cents today. Prices closed nearer the session low. The copper market bulls and bears are on a level near-term technical playing field but the bulls are fading. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 283.10 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 260.00 cents. First resistance is seen at today’s high of 273.90 cents and then at 277.00 cents. First support is seen at the April low of 266.85 cents and then at 265.00 cents. Wyckoff's Market Rating: 5.0.

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.
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