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Gold Hits 4-Week High on Heavy Short Covering and Some Safe-Haven Demand

(Kitco News) - Gold prices popped to a four-week high of $1,156.40 in December Comex futures Thursday. The yellow metal saw a combination of strong short covering in the futures market, bargain hunting in the cash market, and some fresh safe-haven demand amid sharp losses in the U.S. stock market. Buy stop orders were triggered when December gold pushed above what were solid chart resistance levels at last week's high of $1,141.50 and then at the September high of $1,147.30. The next upside objective for the energized gold market bulls is the August high of $1,169.80. December Comex gold was last up $22.00 at $1,153.50 an ounce. December Comex silver was last up $0.0341 at $15.13 an ounce.

While the U.S. stock indexes were solidly lower Thursday, due in part to some downbeat U.S. economic data released in the morning, world stock markets were mixed on the day. Japan’s Nikkei stock index down nearly 3% as Japan markets reopened from a long holiday. China’s Shanghai index was up just over 1%. Traders and investors worldwide and taking their cues from either China or the U.S. In China, the world’s second-largest economy is wavering and that has many markets edgy. And in the U.S., the focus is still on Fed policy—so “Fed speak” will continue to be extra important.

Speaking of which, Fed Chair Yellen’s lecture to a Philip Gamble Memorial group in the afternoon will find traders hoping she will shed some fresh light on just when the U.S. central bank might raise its interest rate for the first time in several years.

The London P.M. gold fix today was $1,154.50 versus the previous London A.M. fixing of $1,134.45.

Technically, December gold futures prices closed nearer the session high and hit a four-week high. Gold bears still have the overall near-term technical advantage but the bulls gained good upside momentum today. Follow-through buying and a bullish weekly high close on Friday would suggest a near-term price uptrend can be sustained. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the August high of $1,169.80. Bears' next near-term downside price breakout objective is closing prices below solid technical support at this week’s low of $1,120.50. First resistance is seen at today’s high of $1,156.40 and then at $1,160.00. First support is seen at $1,147.30 and then at $1,141.50. Wyckoff’s Market Rating: 4.0

December silver futures prices closed nearer the session high today and saw more short covering. Silver bears still have the overall near-term technical advantage but the bulls gained some momentum today. Follow-through buying and a bullish weekly high close on Friday would suggest a near-term price uptrend can be sustained. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the September high of $15.435 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $14.24. First resistance is seen at this week’s high of $15.245 and then at $15.435. Next support is seen at $15.00 and then at today’s low of $14.745. Wyckoff's Market Rating: 3.0.

December N.Y. copper closed up 50 points at 230.05 cents today. Prices closed near mid-range and hit a four-week low today. Copper bears have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the September high of 249.30 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 220.25 cents. First resistance is seen at 232.50 cents and then at 235.00 cents. First support is seen at today’s low of 227.30 cents and then at 225.00 cents. 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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