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(Kitco News) - Comex gold and silver futures prices closed the U.S. day session sharply lower and near the daily lows. The precious metals were hit hard by sharply lower crude oil prices and a stronger U.S. dollar index today. While the losses were heavy in the precious metals Thursday, no significant chart damage occurred in gold or silver. Profit-taking was featured as the metals had scored decent gains recently. August gold last traded down $35.00 an ounce at $1,518.40. Spot gold last traded down $8.60 an ounce at $1,540.00. July Comex silver last traded down $1.759 at $34.98 an ounce.

The precious metals markets were already under selling pressure from the overnight trading session when rumors hit the market place that the International Energy Agency would announce that some major countries would release some of their strategic oil reserves onto the world market place. Gold and silver prices immediately dropped sharply. The IEA did indeed make such an announcement shortly thereafter, and crude oil briefly dropped below $90.00 a barrel and was still holding strong losses in afternoon trading.

The reason given for the release of the oil reserves by major countries was an effort to lower world oil prices in order to jump start flagging world economies. This move came in the wake of Wednesday afternoon's FOMC statement and Fed Chairman Bernanke press conference that saw a downbeat assessment of the U.S. economy. Then, this morning's weekly U.S. jobless claims report was also weak, which also added selling pressure in the stock market and in key commodity markets.

Ironically, the Fed's downbeat economic assessment and recent weak economic data has worked to boost the U.S. dollar index. Some of the greenback's support Thursday was due to the Fed's notions that no more U.S. quantitative easing (printing money) will be implemented.

The U.S. dollar index traded sharply higher Thursday as trading has become choppy in the index. From a fundamental standpoint, it appears the EU debt crisis will prop up the U.S. dollar index and weaken the Euro currency in the coming weeks. While the U.S. dollar index is far from suggesting it can sustain any price uptrend, it does appear the index has limited downside potential, and that's a bearish underlying factor for the precious metals.

The market place is still closely watching the situation in Greece. While the Greek prime minister has survived a no-confidence vote this week, there will be a Greek government vote on austerity measures next Tuesday. The situation is still fluid as Greek citizens are very unhappy about the austerity issue. It would not be surprising to see next Tuesday's Greek vote on implementing austerity programs to be met with protests in the streets. The severity of the protests will be what the market place will be watching. Safe-haven buying interest continues to underpin the precious metals, and especially gold, as the EU sovereign debt saga continues.

The London P.M. gold fixing was $1,523.00 versus the previous P.M. fixing of $1,552.50.

Technically, August Comex gold futures prices closed near the session low Thursday, but no serious chart damage occurred. However, the bulls did fade and follow-through selling pressure and a bearish weekly low close on Friday would likely produce near-term chart damage. Gold bulls still have the overall near-term technical advantage. Prices are still in a 4.5-month-old uptrend on the daily bar chart. Bulls' next near-term upside technical objective is to produce a close above strong technical resistance at this week's high of $1,559.30. Bears' next near-term downside price objective is closing prices below solid technical support at the June low of $1,511.40. First resistance is seen at $1,525.00 and then at $1,530.00. First support is seen at Thursday's low of $1,515.00 and then at $1,511.40. Wyckoff's Market Rating: 7.0.

July silver futures prices closed nearer the session low Thursday, but no serious chart damage occurred. However, the bulls did fade badly Thursday and follow-through selling pressure and a bearish weekly low close on Friday would likely produce near-term chart damage. Silver bulls still have the overall near-term technical advantage. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of $34.40. Bulls' next upside price objective is producing a close above solid technical resistance at this week's high of $36.77 an ounce. First resistance is seen at $35.50 and then at $36.00. Next support is seen at Thursday's low of $34.80 and then at $34.00. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed down 400 points 404.00 cents Thursday. Prices closed near mid-range. The copper market held up fairly well Thursday, given the big sell off in most other commodity markets and the very bearish posture of the key "outside markets"--sharply lower crude oil prices and a sharply higher U.S. dollar index. Copper prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 426.70 cents. The next downside price breakout objective for the bears is closing prices below major psychological support at 400.00 cents. First resistance is seen at Thursday's high of 407.00 cents and then at 410.00 cents. First support is seen at 403.00 cents and then at Thursday's low of 401.00 cents. Wyckoff's Market Rating: 4.5.

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By Jim Wyckoff of Kitco News; jwyckoff@kitco.com

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