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Jim Wyckoff P.M. Kitco Metals Roundup: Comex Gold Ends Lower But Up From Sharp Losses Seen Earlier

18 October 2011, 2:07 p.m.
By Jim Wyckoff
Of Kitco News
http://www.kitco.com/

(Kitco News) - Comex December gold futures prices ended the U.S. day session lower Tuesday, but well up from early sharp losses. A firmer U.S. dollar index prompted some selling pressure in the precious metals Tuesday. However, the dollar index did back well off its daily high as the session wore on, which allowed gold and silver prices to move well off their daily lows. Trading in the precious metals remains choppy on a day-to-day basis. December gold last traded down $22.00 at $1,654.60 an ounce. Spot gold last traded down $17.60 an ounce at $1,653.50. December Comex silver last traded up $0.07 at $31.89 an ounce.

There were developments in overnight trading Tuesday that prompted investors and traders to move into a “risk off” trading mode in the early going. Moody’s issued a statement saying France’s AAA credit rating is in danger of being downgraded due to the EU debt crisis. There was also weaker German and Chinese economic data released overnight. That news pressured the Euro currency and gave the U.S. dollar index a boost. It also put downside price pressure on the European and U.S. stock markets. The weaker-than-expected Chinese GDP data also threw another scare into the commodity markets, which spilled over into the precious metals markets. Recently, on days when the U.S. and European stock markets are lower gold has also seen selling pressure—mainly following most other raw commodity futures markets that also trade lower in such a circumstance. The U.S. dollar index is also generally stronger on such trading days.

The European Union debt and financial crisis remains on the mind of the market place this week. Reports said there is a EU summit meeting taking place this weekend to once again address the matter. The EU crisis will continue to be a major underlying bullish factor for the gold market.

There were speeches by U.S. Federal Reserve officials Tuesday, including Fed Chairman Bernanke. However, comments from those officials failed to register significant reaction from the market place.

The London P.M. gold fixing was $1,631.00 versus the previous P.M. fixing of $1,682.00.

Technically, December gold futures prices closed near mid-range Tuesday. Gold bulls have faded this week. A three-week-old uptrend on the daily bar chart was at least temporarily negated Tuesday. Bulls' next upside technical objective is to produce a close above solid technical resistance at $1,705.40. Bears' next near-term downside price objective is closing prices below psychological support at $1,600.00. First resistance is seen at Tuesday’s high of $1,678.20 and then at this week’s high of $1,696.80. First support is seen at Tuesday’s low of $1,628.20 and then at $1,600.00. Wyckoff's Market Rating: 5.0.

December silver futures prices closed nearer the session high Tuesday. Silver bulls and bears are on a level near-term technical playing field. Silver bulls' next upside price objective is producing a close above strong technical resistance at $33.585 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $30.00. First resistance is seen at Tuesday’s high of $32.12 and then at this week’s high of $32.675. Next support is seen at $31.50 and then at $31.00. Wyckoff's Market Rating: 5.0.

December N.Y. copper closed down 125 points 336.55 cents Tuesday. Prices closed near the session high. A firmer U.S. dollar index also pressured copper. Copper bears have the overall near-term technical advantage as a 2.5-month-old downtrend is in place on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 350.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 300.00 cents. First resistance is seen at 340.00 cents and then at this week’s high of 346.35 cents. First support is seen at 335.00 cents and then at 330.00 cents. Wyckoff's Market Rating: 3.0.

Follow me on Twitter! If you want daily, or nightly, up-to-the-second market analysis on gold and silver price action, then follow me on Twitter. It's free, too. My account is @jimwyckoff .

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

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