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Gold Firmer, Supported By Sell-Off in U.S. Dollar

(Kitco News) - Gold prices ended the U.S. day session firmer Tuesday on a short-covering and bargain-hunting bounce from recent selling pressure. Also, the U.S. dollar index was sharply lower Tuesday, which worked in favor of the precious metals and the raw commodity sector bulls. The greenback and its daily movements continue to exert a keen influence over the metals and many other markets. August Comex gold was last up $5.10 at $1,193.80 an ounce. July Comex silver was last up $0.10 at $16.78 an ounce.

The other key “outside market” on Tuesday was also bullish for the metals, as crude oil prices were higher and hit a two-week high. On tap late this week is a key OPEC oil cartel meeting in Vienna, Austria. The Saudi Arabian oil minister says OPEC’s strategy of not cutting its production is working at weeding out the not-so-strong producers—namely U.S. shale producers.

Reports overnight said meetings between Greece and its European Union/International Monetary Fund creditors in Berlin have made good progress and terms of a draft deal have been reached and could be finalized this week. The Euro currency was lifted on this news. However, “the devil is in the details” and the market place has heard similar positive media reports in recent weeks. There are still many European market watchers who believe Greece will ultimately default on its sovereign debt obligations.

It’s an important week for world economic news. The ECB meets Wednesday for its regular monetary policy meeting. And the big U.S. economic report of the week will come with Friday’s U.S. jobs report from the Labor Department.

The London P.M. fix is $1,192.80 versus the previous A.M. fixing of $1,188.75.

Technically, August gold futures prices closed nearer the session high today. Gold bears still have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,215.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the May low of $1,170.00. First resistance is seen at $1,200.00 and then at this week’s high of $1,204.70. First support is seen at today’s low of $1,185.80 and then at last week’s low of $1,180.20. Wyckoff’s Market Rating: 3.0

July silver futures prices closed nearer the session high today on short covering. Silver bears have the near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the May high of $17.775 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 $17.00 and then at this week’s high of $17.17. Next support is seen at last week’s low of $16.54 and then at $16.25. Wyckoff's Market Rating: 3.0.

July N.Y. copper closed up 180 points at 273.80 cents today. Prices closed nearer the session high on short covering. Prices hit a five-week low Monday. The key “outside markets” were bullish for copper today as the U.S. dollar index was sharply lower and crude oil prices were higher. Copper bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 285.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of 266.00 cents. First resistance is seen at 275.00 cents and then at 277.50 cents. First support is seen at this week’s low of 271.45 cents and then at 270.00 cents. Wyckoff's Market Rating: 4.0.

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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