Gold Sees Some Profit Taking As Risk Appetite Upticks
Tuesday March 01, 2016 14:16
(Kitco News) - Gold saw some profit-taking pressure set in Tuesday, following recent gains. An improved risk appetite on this day also worked against the safe-haven metal. Still, some profit taking and chart consolidation is not unhealthy for a market like gold, which is in a firm near-term price uptrend. April Comex gold was last down $3.10 at $1,231.10 an ounce. May Comex silver was last down $0.143 at $14.775 an ounce.
There was a heavy slate of U.S. economic data due for release Tuesday, including the U.S. manufacturing PMI, construction spending, the ISM manufacturing report on business, and domestic auto industry sales. The data was a mixed bag but was upbeat, overall. That helped to boost the U.S. stock market and the U.S. dollar index, and put some downside pressure on gold.
Global stock markets were also mostly higher Tuesday, despite some dour economic news coming out of China. China’s manufacturing purchasing managers’ index (PMI) came in at 49.0 in February--the lowest level in over four years. A reading of 49.4 was expected. A figure below 50.0 suggests contraction in the sector. The downbeat China PMI report led to further speculation that China’s central bank will implement further monetary policy easing moves, and that was actually a bullish element for Asian equities Tuesday. China’s central bank on Monday lowered its reserve requirement ratio for banks.
Technically, April gold futures prices closed nearer the session low. Prices are still in a 2.5-month-old uptrend on the daily bar chart and bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,263.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at $1,240.00 and then at $1,250.00. First support is seen at $1,225.00 and then at this week’s low of $1,216.30. Wyckoff’s Market Rating: 7.0
May silver futures prices closed near the session low today. The silver market bears have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the February high of $16.005 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at $15.00 and then at today’s high of $15.105. Next support is seen at this week’s low of $14.61 and then at $14.50. Wyckoff's Market Rating: 3.0.
May N.Y. copper closed up 130 points at 214.55 cents today. Prices closed near the session high and closed at a two-month high close today. The copper bears still have the overall near-term technical advantage. However, the bulls have gained some upside momentum recently. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 225.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of 200.20 cents. First resistance is seen at last week’s high of 216.40 cents and then at 220.00 cents. First support is seen at today’s low of 209.55 cents and then at 208.00 cents. Wyckoff's Market Rating: 3.5.
By Jim Wyckoff, contributing to Kitco News; email@example.com
Follow me on Twitter @jimwyckoff