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Gold Up on Short Covering, Bargain Hunting, and Even Some Safe-Haven Buying

(Kitco News)¬†- Gold prices ended the U.S. day session moderately higher Tuesday, on some more short covering in the futures market and bargain hunting in the cash. The key “outside markets” also were in a bullish posture for the precious metals on this day, as the U.S. dollar index was weaker and crude oil prices were solidly higher. August Comex gold was last up $3.80 at $1,177.40 an ounce. July Comex silver was last up $0.001 at $15.96 an ounce.

The gold market could also be receiving some safe-haven buying interest as world stock markets are wobbly at present, including U.S. stock indexes that have backed down from their recent highs.

The market place is awaiting fresh fundamental news, which may not arrive until next week’s FOMC meeting of the U.S. Federal Reserve. Trading action in many markets so far this week is similar to the summertime doldrums that occur during late summer.

In overnight news, China’s consumer price inflation for May came in at up 1.2% in May, year-on-year, versus up 1.5% in April. However, producer prices fell 4.6% in May, year-on-year. This data has deflationary tones and will put more pressure on China’s central bank to stimulate its monetary policy. Asian stock markets were pressured on this news.

In the European Union, the bloc’s gross domestic product rose just 0.4% in the first quarter versus the last quarter of 2014. The report was deemed downbeat and European stock markets saw selling on the news.

The London P.M. fix is $1,177.40 versus the previous A.M. fixing of $1,181.00.

Technically, August gold futures prices closed near mid-range today. Gold bears still have the firm overall near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the March low of $1,143.80. First resistance is seen at today’s high of $1,182.30 and then at $1,190.00. First support is seen at today’s low of $1,171.80 and then at this week’s low of $1,168.50. Wyckoff’s Market Rating: 2.5

July silver futures prices closed nearer the session low today. Prices Monday hit a five-week low. Silver bears have the solid near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.80 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $15.595. First resistance is seen at today’s high of $16.135 and then at $16.25. Next support is seen at this week’s low of $15.88 and then at $15.75. Wyckoff's Market Rating: 2.0.

July N.Y. copper closed up 170 points at 271.35 cents today. Prices closed near mid-range and saw more short covering. The key “outside markets” were also bullish for copper today as the U.S. dollar index was weaker and crude oil prices were higher. Copper still bears have the near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 283.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of 255.40 cents. First resistance is seen at today’s high of 273.55 cents and then at 275.00 cents. First support is seen at today’s low of 269.50 cents and then at last week’s low of 267.00 cents. Wyckoff's Market Rating: 3.0.

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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