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Gold Down, Hits 3.5-Mo. Low, as Bears Gaining Momentum

(Kitco News) -Gold prices ended the U.S. day session moderately lower and hit a 3.5-month low Thursday. A neutral to slightly bullish U.S. jobs report did lift the yellow metal up from its daily low. Investor risk appetite is on the upswing late this week, which is bearish for safe-haven gold. Also, the fully bearish technical postures for both gold and silver are keeping the sellers very confident at present. Gold bulls have been frustrated by the Greek debt crisis giving no support to their safe-haven asset. August Comex gold was last down $5.40 at $1,163.90 an ounce. September Comex silver was last down $0.007 at $15.57 an ounce.

Thursday morning’s U.S. employment report for June from the Labor Department saw the key non-farm payrolls number at up 223,000. That was slightly lower than the expected rise of just above 230,000. The report was released one day early due to the U.S. Independence Day holiday on Friday. Gold popped a few dollars higher on the news, but could not push above the unchanged level.

The U.S. dollar index weakened on the jobs report, which also helped pull the gold market up from its daily low. Trading action quickly tapered off as many traders hit the exit doors early to get a jump on the long U.S. holiday weekend.

Greece is now in default on its loans from the International Monetary Fund and European Union. There are now reports Thursday Greece is backtracking a bit and that a debt-refinancing/financial aid deal with the IMF/EU is close. However, the market place has recently heard this before, only to see the negotiations fall apart. The July 5 Greece referendum on acceptance of austerity measures is the next focal point.

Market events this week in China have been overshadowed by the Greek debt crisis. However, many observers argue recent economic developments in China are more important to world markets than the Greece matter. The Chinese stock market sold off again Friday, despite government efforts to ease the selling pressure by lowering margin requirements for trading stocks. It appears the China stock market bubble has burst. China’s economy—which is the world’s second-largest—is starting to wobble after several years of very strong growth rates.

The London P.M. gold fix is $1,165.25 versus the previous A.M. fix of $1,164.30.

Technically, August gold futures bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,187.60. 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 $1,168.20 and then at $1,175.00. First support is seen at today’s low of $1,155.80 and then at $1,150.00. Wyckoff’s Market Rating: 1.5

September silver futures bears have the solid near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $16.04 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $15.38. First resistance is seen at Wednesday’s high of $15.685 and then at Tuesday’s high of $15.84. Next support is seen at this week’s low of $15.435 and then at $15.38. 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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