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P.M. Kitco Metals Roundup: Comex Gold Ends Weaker, at 4.5-Month Low, amid Bearish "Outside Markets," Weak Technicals

Tuesday May 15, 2012 1:58 PM

Comex gold futures prices ended the U.S. day session weaker Tuesday as prices fell to another 4.5-month low. The key “outside markets” turned bearish for the precious metals as the session wore on Tuesday, as the U.S. dollar index firmed and crude oil prices weakened. Near-term technical remain fully bearish for gold and silver, which is adding to selling pressure. June gold last traded down $5.10 at $1,556.00 an ounce. Spot gold was last quoted down $0.40 an ounce at $1,556.50. ┬áJuly Comex silver last traded down $0.373 at $27.98 an ounce.

The U.S. dollar index traded solidly higher and hit a fresh four-month high Tuesday, on fresh safe-haven demand due to the EU situation and the recent JP Morgan news. Crude oil futures prices were lower Tuesday after hitting a 4.5-month of $93.65 on Monday. Crude oil remains in a bearish fundamental and technical posture.

The European Union debt and financial crisis is still on the front burner of the market place. Tuesday’s developments included the latest collapse in talks among Greek politicians to form a coalition government. That spooked the market place a bit more. Also, German and Euro zone GDP data was stronger than expected. However, that good news was offset by Moody’s downgrading Italian banks ratings late Monday. That move was not surprising to the market place. There is also increasing talk that Greece will at some point make an exit from the European Union.

In other news, famed investor Jimmy Rodgers said on CNBC Monday afternoon that the selling pressure in many commodity futures markets recently is partly due to JP Morgan liquidating at least some of its long positions in commodity futures markets, in light of its $2 billion derivatives trading loss. Latest commitment of traders data from the CFTC does corroborate major speculator long liquidation in many commodity futures markets, especially crude oil. Rodgers also said he remains bullish gold and said this latest pullback in gold prices will prove to be a value-buying opportunity.

The London P.M. gold fixing was $1,556.50 versus the previous London P.M. fixing of $1,556.50.

Technically, June gold futures prices closed near mid-range Tuesday and hit another fresh 4.5-month low. Serious near-term chart damage has been inflicted recently. Gold bears have the solid near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,600.00. Bears' next near-term downside price objective is closing prices below technical support at the December low of $1,528.60. First resistance is seen at Tuesday’s high of $1,564.40 and then at $1,575.00. First support is seen at Tuesday’s low of $1,546.80 and then at $1,540.00. Wyckoff's Market Rating: 3.0.

July silver futures prices closed nearer the session low Tuesday and hit another fresh 4.5-month low. Silver prices are in a 2.5-month-old downtrend on the daily bar chart. The silver bears have the solid near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above psychological resistance at $30.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $26.50. First resistance is seen at Tuesday’s high of $28.43 and then at this week’s high of $29.00. Next support is seen Tuesday’s low of at $27.90 and then at $27.50. Wyckoff's Market Rating: 3.0.

July N.Y. copper closed down 385 points 351.55 cents Tuesday. Prices closed nearer the session low and hit another fresh four-month low. The key “outside markets” were in a bearish posture for copper again Tuesday, as the U.S. dollar index was higher and the crude oil market was lower. Copper bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 371.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at 355.00 cents and then at 357.75 cents. First support is seen at 350.00 cents and then at 347.50 cents. Wyckoff's Market Rating: 3.5.

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 .

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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