A.M. Kitco Metals Roundup: Gold Firmer, Hits 2-Week High Overnight

By Jim Wyckoff
5 April 2010, 8:25 a.m.

Gold prices are trading modestly higher Monday. A weaker U.S. dollar index and higher crude oil prices are supporting the precious metals markets in the early going Monday. June Comex gold was last quoted up $2.40 an ounce at $1,128.50.

Friday's much-anticipated U.S. jobs report was deemed a bit bearish for gold. The U.S. dollar index rallied on the news of a rise in non-farm payrolls for the first time in well over a year. Friday's jobs data did prompt speculation the U.S. Federal Reserve will hike interest rates sooner rather than later. That is a bearish underlying portent for the precious metals, as the U.S. dollar would likely strengthen on higher U.S. interest rates.

U.S. reports due for release Monday included the Institute for Supply Management non-manufacturing survey, the Conference Board's employment trends index and pending U.S. home sales.
Spot gold trading in London also saw firmer prices in quieter dealings. Traders in London are awaiting fresh clues from U.S. trading action. They also look for the precious metals to continue to take their cues from movements in the currency markets.

Technically, June Comex gold futures bulls have gained fresh upside near-term technical momentum recently. Price action last week produced a technically bullish weekly high close and also negated a four-week-old downtrend line drawn on the daily bar chart. For June gold, shorter-term technical resistance is seen at the last "reaction high" on the daily bar chart, located at $1,135.00, and then at $1,140.00. Buy stops likely reside just above those levels. Sell stops likely reside just below shorter-term support at $1,120.00 and then at $1,112.00. Today's key near-term Fibonacci pivot level for June gold: $1,124.00.

Comex silver futures are higher in early trading Monday, and hit a fresh 11-week high overnight. Prices last week also produced a technically bullish weekly high close. The silver bulls have upside near-term technical momentum. May silver last traded up 8.0 cents an ounce at $17.97. The weaker dollar and firmer crude oil prices are also supportive for silver Monday. May silver finds shorter-term technical resistance at the overnight high of $18.015 and then at $18.25. Buy stops likely reside just above those levels. Shorter-term technical support for May silver is located at the overnight low of $17.81 and then at $17.665. Sell stops are likely placed just below those levels. Today's key Fibonacci pivot level for May silver futures is located at $17.30.

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