P.M. Kitco Metals Roundup: Gold Sharply Lower on Goldman News, Profit-Taking Pressure

By Jim Wyckoff
16 April 2010, 2:20 p.m.

Comex gold futures closed solidly lower, nearer the session low and closed at a near-term technically bearish weekly low close on Friday. News that Goldman Sachs and another major Wall Street player have been charged by the SEC with fraud put commodity futures markets, especially gold, into a tailspin. June Comex gold closed down $23.40 an ounce at $1,136.90.

Gold prices were already under modest profit-taking pressure in early trading Friday as the U.S. dollar index and crude oil futures prices were lending to selling interest in the precious metals. Then around mid-morning the news reports surfaced that Goldman has been charged with fraud. Another market-maker, Paulson & Co, was also charged with defrauding investors. Reports also said Paulson & Co. has a large long position in a gold exchange traded fund, which lent more selling pressure to gold futures, amid the uncertainty of the situation.

Ongoing worries about Greece being able to meet its debt obligations also pressured the Euro currency Friday, which was another bearish factor for gold. In the latest news reports, after a meeting Friday the European Union and Greece still have not come to final terms on how to begin to get Greece's debt situation under control.

The London P.M. gold fixing was $1,151.50, compared to the previous P.M. fixing of $1,154.50.

Technically, June Comex gold futures prices did see a bearish weekly low close on Friday, as prices also hit a fresh two-week low. While no serious chart damage occurred Friday, the bulls did fade and need to show fresh power soon. Strong follow-through selling pressure on Monday or Tuesday of next week would produce significant chart damage to begin to suggest a near-term market top is in place. But right now the bulls still have the overall near-term technical advantage. A nine-week-old uptrend line is still in place on the daily bar chart. Bulls' next upside technical objective is to produce a close above solid resistance at this week's high of $1,170.70. Bears' next downside price objective is closing prices below solid technical support at $1,100.00. First resistance is seen at the March high of $1,146.60 and then at $1,151.00. Support is seen at Friday's low of $1,130.00 and then at $1,125.40. Wyckoff's Market Rating: 6.5.

May Comex silver futures closed down 75.8 cents at $17.675 an ounce Friday. Prices closed nearer the session low, hit a fresh two-week low and closed at a technically bearish weekly low close. No serious chart damage was inflicted Friday, but the bulls did fade and need to show fresh power soon. Silver bulls do still have the overall near-term technical advantage. Prices are still in a nine-week-old uptrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at $17.00. Bulls' next upside price objective is closing prices above solid technical resistance at this week's high of $18.605 an ounce. First resistance is seen at $18.00 and then at $18.25. Next support is seen at Friday's low of $17.61 and then at $17.50. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed down 860 points at 351.45 cents Friday. Prices closed nearer the session low on profit-taking pressure. Prices also closed at a bearish weekly low close Friday. Bulls did fade Friday, but no serious chart damage occurred.. A stronger U.S. dollar index and lower crude oil prices did pressure the red industrial metal. The copper bulls still have the overall near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. Bulls' next upside objective is pushing and closing prices above solid technical resistance at this week's high of 368.00 cents. First resistance is seen at 355.00 cents and then at 357.50 cents. First support is seen at Friday's low of 349.15 cents and then at 347.50 cents. Wyckoff's Market Rating: 7.0.

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