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P.M. Kitco Metals Roundup: Gold Ends Firmer, but Off Daily High, on more Chart Consolidation

Tuesday September 25, 2012 1:56 PM

Comex gold prices ended the U.S. day session slightly higher Tuesday. Both gold and silver backed down from their daily highs on some mild profit-taking pressure later in the session. However, these precious metals continue to hover near their 6.5-month highs as gold and silver bulls maintain their solid near-term technical advantage. December gold last traded up $2.40 at $1,767.00 an ounce. Spot gold was last quoted steady at $1,765.00.  December Comex silver last traded down $0.024 at $33.955 an ounce.

There was just a bit more of a “risk-on” trader mentality Tuesday, following the keener risk aversion seen in the market place on Monday. Fresh U.S. economic data released Tuesday had no major impact on the precious metals or the rest of the market place.

In overnight developments there was also nothing major or market-moving. There was a more upbeat consumer confidence report coming out of Germany, following recent weaker data coming from the European Union’s largest economy. Reports said Spain will announce a new budget and reform plan on Thursday, while Greece will do the same later this week. Fresh comments from European Central Bank president Draghi and German chancellor Merkel were not deemed new or market-moving Tuesday.

The U.S. dollar index was slightly higher Tuesday, on more short covering and on some perceived safe-haven demand for the greenback. The U.S. dollar bears still have the overall near-term technical advantage as a nine-week-old downtrend line remains in place on the daily bar chart. Meantime, Nymex crude oil prices are weaker Tuesday. Oil bears still have some downside momentum to suggest a near-term market top is in place. These two key “outside markets” will continue to have a significant daily influence on precious metals prices.

The London P.M. gold fixing is $1,771.50 versus the previous P.M. fixing of $1,762.50.

Technically, December gold futures prices closed near mid-range again Tuesday and saw more chart consolidation. Prices last Friday hit a 6.5-month high and bulls still have the solid overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the 2012 high of $1,800.90. Bears' next near-term downside price objective is closing prices below solid technical support at $1,720.00. First resistance is seen at Tuesday’s high of $1,777.90 and then at $1,781.80. First support is seen at this week’s low of $1,757.90 and then at last week’s low of $1,753.20. Wyckoff’s Market Rating: 7.5

December silver futures prices closed nearer the session low Tuesday and saw some more profit taking and chart consolidation. Silver bulls are still in firm near-term technical command as prices last Friday hit a 6.5-month high. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $36.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $32.51. First resistance is seen at this week’s high of $34.585 and then at $35.00. Next support is seen at this week’s low of $33.63 and then at $33.25. Wyckoff's Market Rating: 7.5.

December N.Y. copper closed up 320 points at 376.35 cents Tuesday. Prices closed near mid-range. Copper bulls still have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. A bull flag pattern has formed on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the September high of 383.95 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 364.00 cents. First resistance is seen at Tuesday’s high of 378.40 cents and then at 380.00 cents. First support is seen at 375.00 cents and then at Tuesday’s low of 373.05 cents. Wyckoff's Market Rating: 6.5.

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 .

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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