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Jim Wyckoff P.M. Kitco Metals Roundup: Comex Gold Ends Near Steady As Bargain Hunters Step In to Buy Weakness

15 November 2011, 2:21 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 near unchanged price levels Tuesday. Prices were modestly lower in early U.S. trading, on bearish “outside market” forces—a firmer U.S. dollar index and weaker crude oil prices. However, crude oil prices rebounded as the trading session wore on and provided a lift to gold as well as most other commodity markets. December gold last traded up $1.20 at $1,779.60 an ounce. Spot gold last traded down $1.40 an ounce at $1,779.25. December Comex silver last traded up $0.471 at $34.495 an ounce.

The precious metals continue to be influenced by key outside markets that include the U.S. dollar index, crude oil and the U.S. and European stock indexes. The U.S. dollar index traded firmer again Tuesday on perceived safe-haven investment demand due to the European Union debt crisis. The dollar index bulls have gained upside near-term technical momentum recently. That is a bearish underlying fundamental for the precious metals. Crude oil prices were slightly lower Tuesday morning but then rallied by midday and hit a fresh 13-week high of $99.84 a barrel. Crude is an overall bullish “outside market” force for the precious metals, as crude prices remain in a solid near-term uptrend. U.S. stock indexes moved up from their daily lows by afternoon trading Tuesday, which boosted the commodity markets and in turn gave a modest upside push to gold and silver.

The European Union financial and sovereign debt crisis has heated up again as European bond yields are rising, including Italian bonds moving above the critical 7% level Tuesday. The EU debt crisis is still far from being resolved and could escalate on a moment’s notice. While not evident the past few days, the heightened EU uncertainty remains an overall bullish underlying factor for the gold market. It can be argued that gold prices could presently be trading significantly lower if not for this major sore in the world market place continuing to fester.

The London P.M. gold fixing was $1,785.00 versus the previous P.M. fixing of $1,776.00.

Technically, December gold futures prices closed nearer the session high Tuesday. Gold bulls still have the overall near-term technical advantage. A seven-week-old uptrend is still in place on the daily bar chart. Bulls' next upside technical objective is to produce a close above solid technical resistance at last week’s high of $1,804.40. Bears' next near-term downside price objective is closing prices below solid technical support at last week’s low of $1,736.60. First resistance is seen at Tuesday’s high of $1,787.80 and then at this week’s high of $1,797.60. First support is seen at Tuesday’s low of $1,760.90 and then at $1,754.00. Wyckoff's Market Rating: 7.0.

December silver futures prices closed nearer the session high Tuesday. The key “outside markets” were in a neutral posture for silver, as the U.S. dollar index was higher and crude oil prices were also higher. The silver bulls have the overall near-term technical advantage. A seven-week-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is producing a close above solid technical resistance at the October high of $35.70 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of $32.105. First resistance is seen at Tuesday’s high of $34.835 and then at $35.00. Next support is seen at Tuesday’s low of $33.75 and then at $33.50. Wyckoff's Market Rating: 6.0.

December N.Y. copper closed up 190 points 350.70 cents Tuesday. Prices closed nearer the session high. More short covering was featured. The key “outside markets” were in a neutral posture for copper Tuesday, as the U.S. dollar index was higher and crude oil prices were also higher. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week’s high of 365.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of 331.80 cents. First resistance is seen at Tuesday’s high of 352.15 cents and then at 355.00 cents. First support is seen at Tuesday’s low of 345.40 cents and then at 342.50 cents. Wyckoff's Market Rating: 5.0.

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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