P.M. Kitco Metals Roundup: Gold Ends Firmer on Short Covering

By Jim Wyckoff
25 March 2010, 2:05 p.m.

April Comex gold futures closed up $4.10 an ounce at $1,092.90 Thursday. Prices closed nearer the session high and were supported on short covering following recent selling pressure. Higher crude oil futures prices added to buying interest in gold, but a rebound in the U.S. dollar index late Thursday, after trading steady to below unchanged for much of the session, did limit the upside in gold. The dollar index, which is a basket of six major currencies weighted against the greenback, poked to another a fresh 10-month high Thursday.

Precious metals traders are awaiting results from the European Union leaders two-day meeting in Brussels, which began Thursday. Early reports indicated there is a plan in the works that involves the EU and the International Monetary Fund combining to offer Greece a debt aid package. However, the head of the European Central Bank, Jean-Claude Trichet, also reportedly said he is not keen to bail out Greece. Details were sketchy and the currency and metals markets showed little initial price reaction to the reports. There are mixed ideas on whether the EU will come to a substantive, formal agreement at the meeting, regarding a specific rescue package for Greece.

Precious metals traders on Thursday kept one eye on the Commodity Futures Trading Commission hearing on whether to set new trading position limits on U.S. metals futures. The hearing had so far produced no unexpected pronouncements, wire reports said.

Technically, April gold futures have seen some more near-term chart damage inflicted this week. Prices are in a three-week-old downtrend on the daily bar chart. Bulls' next upside technical objective is to produce a close above solid technical resistance at $1,120.00. Bears' next downside price objective is closing prices below solid technical support at $1,075.00. First resistance is seen at Thursday's high of $1,095.60 and then at $1,100.00. Support is seen at this week's low of $1,084.80 and then at $1,080.00. Wyckoff's Market Rating: 4.5.

May Comex silver futures closed up 10.0 cents at $16.741 an ounce today. Prices closed near mid-range and saw short covering following recent selling pressure. Some near-term chart damage has been inflicted this week as prices are in a two-week-old downtrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at $16.00. Bulls' next upside price objective is closing prices above solid technical resistance at the March high of $17.665 an ounce. First resistance is seen at Thursday's high of $16.86 and then at $17.00. Next support is seen at this week's low of $16.55 and then at the March low of $16.33. Wyckoff's Market Rating: 4.5.

May N.Y. copper closed up 350 points at 338.05 cents Thursday. Prices closed nearer the session high. The copper market was supported by mostly bullish "outside markets" that included a steady U.S. dollar index and higher crude oil and stock index futures prices. The copper market bulls have the overall near-term technical advantage. However, prices are still trending gently lower from the early-March high. The next downside price objective for the bears is closing prices below solid technical support at the March low of 329.00 cents. Bulls' next upside objective is pushing and closing prices above solid technical resistance at the March high of 348.70 cents. First resistance is seen at Thursday's high of 338.70 cents and then at 340.00 cents. First support is seen at 335.00 cents and then at this week's low of 331.05 cents. Wyckoff's Market Rating: 6.5.

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