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P.M. Kitco Metals Roundup: Comex Gold Ends Weaker on More Profit Taking, Chart Consolidation; Jackson Hole Looms

Wednesday August 29, 2012 2:36 PM

Comex gold futures prices ended the U.S. day session modestly lower in subdued trading Wednesday.  More profit-taking and chart consolidation were seen in the precious metals as the market place waits for an important speech by U.S. Federal Reserve Chairman Ben Bernanke on Friday. The outside markets were in a mildly bearish posture for the precious metals Wednesday, as the U.S. dollar index was firmer and crude oil prices were weaker. December gold last traded down $7.00 at $1,662.70 an ounce. Spot gold was last quoted down $6.10 an ounce at $1,661.00.  December Comex silver last traded down $0.093 at $30.87 an ounce.

The world market place awaits the U.S. Federal Reserve’s annual meeting at Jackson Hole, Wyoming, which begins Thursday. Fed Chairman Bernanke’s Friday speech will be the highlight of the event, after European Central Bank chief Mario Draghi on Tuesday cancelled his scheduled appearance in Jackson Hole. Next week’s monthly European Central Bank meeting (September 6) will also be an important central bank meeting. Anticipation is high that both the U.S. and EU central banks will announce fresh monetary stimulus initiatives at these meetings. Many markets are subdued ahead of these key events, including the precious metals.

In overnight news, European stock markets were boosted on news that ECB president Draghi said in a German newspaper article that maintaining price stability in the European Union is paramount and will require exceptional measures. There was also a successful debt auction in Italy Wednesday, as borrowing costs declined. And Greece’s finance minister says his country is close to finalizing budget cut plans. In Asia, reports said China’s central bank is looking to inject more liquidity into the country’s banking system, in order to stimulate economic growth.

The U.S. dollar index was firmer Wednesday on tepid short covering. The greenback bears still have the slight near-term technical advantage as a five-week-old downtrend line is in place on the daily bar chart. Meantime, crude oil prices were weaker Wednesday, in part due to a bearish weekly U.S. energy stocks report. Oil bulls still have the near-term technical advantage. The precious metals markets will continue to look closely at how these two key “outside markets” trade on a daily basis.

The London P.M. gold fixing is $1,660.00 versus the previous P.M. fixing of $1,668.00.

Technically, December gold futures prices closed near mid-range Wednesday.  Gold prices are in a choppy, two-month-old uptrend on the daily bar chart. The gold market bulls still have the overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,700.00. Bears' next near-term downside price objective is closing prices below solid technical support at $1,633.30. First resistance is seen at Wednesday’s high of $1,672.50 and then at this week’s high of $1,679.30. First support is seen at Wednesday’s low of $1,654.40 and then at $1,650.00. Wyckoff’s Market Rating: 6.0

December silver futures prices closed nearer the session high Wednesday and saw mild profit-taking pressure. Silver bulls still have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $31.50 an ounce. The next downside price breakout objective for the bears is closing prices below major psychological support at $30.00. First resistance is seen at Wednesday’s high of $31.03 and then at this week’s high of $31.315. Next support is seen at this week’s low of $30.575 and then at $30.285. Wyckoff's Market Rating: 6.5.

December N.Y. copper closed down 210 points at 344.80 cents Wednesday. Prices closed near mid-range. The key “outside markets” were bearish for the copper market Wednesday, as the U.S. dollar index was firmer and crude oil prices were weaker. 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 347.30 cents and then at last week’s high of 351.70 cents. First support is seen at Wednesday’s low of 342.80 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.

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