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P.M. Kitco Metals Roundup: Comex Gold Sells Off Sharply amid Fully Bearish Outside Market Forces

Thursday June 21, 2012 2:06 PM

Comex gold futures prices ended the U.S. day session sharply lower and at a fresh three-week-low close Thursday. The key “outside markets” were fully bearish for the precious metals Thursday--the U.S. dollar index posted strong gains, while crude oil prices were sharply lower and hit a fresh 8.5-month low. It was also a raw-commodity-market-bearish "risk-off" day in the market place Thursday, following downbeat economic data coming out of China overnight and after Tuesday's FOMC report that showed an anemic U.S. economy. Gold bears also gained fresh downside near-term technical momentum Thursday. August gold last traded down $48.00 at $1,567.80 an ounce. Spot gold was last quoted down $39.50 an ounce at $1,567.75.  July Comex silver last traded down $1.484 at $26.915 an ounce.

The market place was disappointed with the results of the U.S. Federal Reserve’s Federal Open Market Committee meeting that ended Wednesday afternoon. While most expected the “Twist” operation would be extended, the significantly more downbeat assessment of the U.S. economy from the Fed was a bit of a surprise and sent fresh shudders through the market place. Then overnight China announced weaker manufacturing activity to further depress the market place.

The FOMC and China manufacturing news have, for the moment, overshadowed the festering European Union sovereign debt crisis. Spanish bonds that were auctioned Thursday did see EU era record-high yields fetched. It won’t be long before the EU debt crisis is back on the front burner of the market place—and that could be just what the doctor ordered for the gold market bulls. There has been fresh safe-haven buying interest surface in gold recently when the EU debt crisis escalates.

The U.S. dollar index was solidly higher Thursday on safe-haven buying as the greenback bulls regained some fresh upside technical momentum. Meantime, Nymex crude oil futures prices were solidly lower Thursday and slumped to a fresh 8.5-month low of $78.47 a barrel. Crude oil remains in an overall fully bearish fundamental and technical posture. 

The London P.M. gold fix is $1,582.00 versus the previous London P.M. fixing of $1,601.00.

Technically, August gold futures prices closed near the session low and closed at a fresh three-week low close Thursday as the bulls have faded badly. Gold market bears have regained the overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,642.40. Bears' next near-term downside price objective is closing prices below solid technical support at the May low of $1,529.30. First resistance is seen at $1,575.00 and then at $1,580.00. First support is seen at Thursday’s low of $1,564.80 and then at $1,556.40. Wyckoff’s Market Rating: 4.0

July silver futures prices closed near the session low Thursday and closed at a fresh 1.5-year low close. Serious near-term technical damage was inflicted Thursday in silver. Bears have the solid overall near-term technical advantage and gained more power Thursday. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $29.095 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $26.73. First resistance is seen at $27.00 and then at $27.17. Next support is seen at $26.73 and then at $26.50. Wyckoff's Market Rating: 3.0.

July N.Y. copper closed down 915 points 329.50 cents Thursday. Prices closed near the session low. The key “outside markets” were fully bearish for copper Thursday, as the U.S. dollar index was solidly higher while crude oil prices were sharply lower. Copper bears have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 347.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of 323.80 cents. First resistance is seen at 332.50 cents and then at 335.00 cents. First support is seen at Thursday’s low of 329.45 cents and then at 326.35 cents. Wyckoff's Market Rating: 2.5.

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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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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