(Kitco News) - Comex gold futures notched another fresh all-time record high of $1,456.40 an ounce Tuesday. The precious yellow metal got a fresh influx of investment buying based upon heightened inflationary expectations, safe-haven demand and a weakening U.S. dollar index. Comex June gold last traded up $21.60 an ounce at $1,454.60. Spot gold last traded up $19.10 at $1,454.00.
Gold prices surged to a new record high just before midday Tuesday, when pre-placed buy stop orders were triggered as prices began to rally after a weaker-than-expected U.S. ISM report was released, which put downside price pressure on the U.S. dollar index.
The inflationary implications of crude oil prices around $108.00 a barrel, other commodity market prices that are at or near all-time highs and very stimulative monetary policies from the world's major central banks have produced heightened inflation concerns among investors. This is very bullish for the precious metals markets. Also, from a safe-haven demand perspective, precious metals traders will continue to look to the crude oil futures market as a gauge of the present world geopolitical tension, especially in the volatile Middle East.
While there were no major new developments on the world geopolitical front Tuesday, there is still NATO military action occurring in Libya, and civil unrest is still simmering in other parts of the Middle East and north Africa. Japan's nuclear crisis is far from over and the European Union's sovereign debt problems continue to fester. Precious metals traders reckon that at any time a fresh flare-up will occur somewhere to produce fresh safe-haven investment demand for gold and silver. Recent history does prove this notion to be correct.
The U.S. dollar index traded slightly lower Tuesday, and sunk to its daily low on the weaker-than-expected ISM report. The overall technical posture of the U.S. dollar index remains fully bearish, and that continues to be an underlying bullish factor for the precious metals.
The London P.M. gold fix was $1,433.50 versus the previous P.M. fixing of $1,435.50.
Technically, June Comex gold futures prices closed near the session high Tuesday and hit a fresh all-time record high. Bulls have the strong overall near-term and longer-term technical advantage and gained fresh upside momentum today. Prices are in a two-month-old uptrend on the daily bar chart. Bulls' next near-term upside technical objective is to produce a close above major psychological resistance at $1,500.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at this week's low of $1,429.10. First resistance is seen at Tuesday's all-time high of $1,456.40 and then at $1,460.00. First support is seen at $1,450.00 and then at $1,441.00. Wyckoff's Market Rating: 9.5.
May silver futures closed up 75.1 cents at $39.245 an ounce Tuesday. Prices closed nearer the session high and hit another fresh 31-year high. Bulls have the strong overall near-term technical advantage. A two-month-old uptrend is in place on the daily bar chart. There are still no early clues to suggest a market top is close at hand. The next downside price breakout objective for the bears is closing prices below solid technical support at $37.00. Bulls' next upside price objective is producing a close above psychological resistance at $40.00 an ounce. First resistance is seen at Tuesday's high of $39.30 and then at $39.50. Next support is seen at $39.00 and then at $38.50. Wyckoff's Market Rating: 9.5.
May N.Y. copper closed up 70 points at 426.20 cents Tuesday. Prices closed near mid-range. Gains in copper were limited by news that China once again raised its interest rates today. Bulls still have the overall near-term technical advantage. However, prices are in a seven-week-old downtrend on the daily bar chart. Bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 445.45 cents. The next downside price breakout objective for the bears is closing prices below strong technical support at the March low of 407.60 cents. First resistance is seen at Tuesday's high of 428.95 cents and then at Monday's high of 431.00. First support is seen at last week's low of 421.20 cents and then at 420.00 cents. Wyckoff's Market Rating: 6.0.
By Jim Wyckoff of Kitco News; jwyckoff@kitco.com
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