A.M. Kitco Metals Roundup: Gold Weaker as Bulls Lose Near-Term Technical Momentum

By Jim Wyckoff
23 March 2010, 8:45 a.m.

Gold prices are modestly lower in early trading Tuesday as the bulls are fading from a near-term technical perspective. April Comex gold was last quoted down $4.80 an ounce at $1,094.70.  Gold is again seeing downside pressure from bearishly postured "outside markets" early Tuesday--a firmer U.S. dollar index and weaker crude oil futures prices.

Spot gold in Europe was also weaker Tuesday. London traders said the spot gold market saw selling pressure from a weaker Euro currency on worries the European Union will fail to agree on a debt aid package for Greece when the group meets in Brussels later this week. Germany is increasingly at odds with other EU countries, regarding bailing out Greece. Greece's finance minister said Tuesday his country did not need any financial aid, but traders paid little attention to that political rhetoric. Gold traders will continue to very closely monitor any new developments coming from the European Union, regarding Greece.

In other overnight news, reports quoted a South Korean finance minister as saying his country is not considering buying more gold to add to its official reserves. That came in response to a newspaper report saying the country may be looking to increase its gold reserves.

In overnight trading, the London A.M. gold fix was $1,100.75 versus the previous afternoon fixing of $1,097.25. 

Technically, April Comex gold bulls are fading as prices are now in a fledging three-week-old price downtrend on the daily bar chart. Prices Monday hit a fresh four-week low. Key chart support is located at $1,088.50. A close below that important technical level would produce more near-term technical damage. For April gold, shorter-term technical resistance is seen at the overnight high of $1,106.10 and then at Monday's high of  $1,108.60. Buy stops likely reside just above those levels. Stronger chart resistance is located at last week's high of $1,133.90. Sell stops likely reside just below shorter-term support at Monday's low of $1,092.10 and then at $1,088.50. Today's key near-term Fibonacci pivot level for April gold: $1,095.00.

Comex silver futures are lower in early trading Tuesday, amid the firmer U.S. dollar and weaker crude oil prices.  Prices hit a fresh three-week low on Monday as the silver bulls are also fading, technically. May silver last traded down 13.5 cents an ounce at $16.80. May silver finds shorter-term technical resistance at the overnight high of $17.015 an ounce, and then at $17.25. Buy stops likely reside just above those levels. Shorter-term technical support for May silver is located at Monday's low of $16.62 and then at $16.50. Sell stops are likely placed just below those levels. Today's key Fibonacci pivot level for May silver futures is located at $16.53.

By Jim Wyckoff, contributing to Kitco News; jim@jimwyckoff.com