Editor's note: Catch the Latest Happening with Kitco Video News!

P.M. Kitco Metals Roundup: Gold Higher in Late Trading, at 4-Mo. High, on Bullish FOMC Minutes

Wednesday August 22, 2012 2:18 PM

Comex gold futures prices are trading modestly higher in late-afternoon trading Wednesday, and hit a fresh nearly four-month high, following a bullish reading of the minutes of the last meeting of the Federal Reserve’s Federal Open Market Committee. The gold and silver bulls have also gained fresh upside near-term technical momentum this week. December gold last traded up $6.60 at $1,649.60 an ounce. Spot gold was last quoted up $8.20 an ounce at $1,647.25.  September Comex silver last traded up $0.217 at $29.655 an ounce.

The minutes of the last FOMC meeting showed members believe that further quantitative easing of monetary policy will be required if the U.S. economy does not show improvement soon. The precious metals were boosted to their daily highs on the news, albeit in modest fashion, while the U.S. dollar index sold off to its daily low. It was not widely expected the FOMC minutes would reveal anything new that would further suggest another round of quantitative easing of U.S. monetary policy is right around the corner. But the market place was a bit surprised by the meeting minutes that hinted such is indeed the case. Most market watchers are now looking ahead to next week’s annual Jackson Hole Federal Reserve confab, which will feature remarks from Fed Chairman Ben Bernanke. It’s either at that time or at the mid-September FOMC meeting that many hope the Fed announces a new monetary stimulus plan—nicknamed QE3.

In overnight news, European stock markets were weaker ahead of meetings between Greek and European Union officials later this week. Greece’s prime minister says his country needs more time to implement austerity measures. A two-year German note auction overnight fetched no yield, which suggests investors in Europe are still very uncertain and seeking safer-haven assets. Traders and investors are awaiting the September 6 monthly press conference of European Central Bank president Draghi, at which time he is expected to unveil some new initiatives to support financially troubled EU countries.

The U.S. dollar index is weaker in late trading Wednesday, and hit a fresh seven-week low following the FOMC minutes. The greenback bulls are fading as a four-week-old downtrend line is in place on the daily bar chart. Crude oil prices were slightly high Wednesday afternoon after hitting a three-month high on Tuesday. Oil bulls still have some upside near-term technical momentum. The precious metals markets will continue to look closely at how these two key “outside markets” trade on a daily basis.

News reports Wednesday said the Pimco investment fund is adding to its gold holdings because it reckons inflation will increase next few years.

The London P.M. gold fix is $1,642.00 versus the previous London P.M. fixing of $1,639.50.

Technically, December gold futures were nearer the session high late Wednesday and did hit a fresh 3.5-month high. Bulls have gained fresh upside technical momentum this week as prices are on the verge of a bullish upside “breakout” from the choppy and sideways trading range that has been in place on the daily chart for nearly three months. The gold market bulls have the slight overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,675.00. Bears' next near-term downside price objective is closing prices below solid technical support at the August low of $1,586.30. First resistance is seen at today’s high of $1,650.60 and then at $1,660.00. First support is seen at $1,633.30 and then at $1,625.00. Wyckoff’s Market Rating: 5.5

September silver futures prices closed nearer the session high again Wednesday and hit another fresh 2.5-month high. This week’s price action in silver has produced a big and bullish upside breakout from a sideways and choppy trading range that had been in place on the daily bar chart. Silver bulls have the overall near-term technical advantage and have upside momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the June high of $29.915 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $27.50. First resistance is seen at today’s high of $29.67 and then at $29.915. Next support is seen at today’s low of $29.17 and then at $29.00. Wyckoff's Market Rating: 6.0.

September N.Y. copper closed up 10 points at 345.40 cents today. Prices closed near mid-range Wednesday. Copper bulls and bears are on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 355.65 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 328.85 cents. First resistance is seen at Wednesday’s high of 347.45 cents and then at 350.00 cents. First support is seen at Wednesday’s low of 342.90 cents and then at 340.00 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, 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.

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart