P.M. Kitco Metals Roundup: Gold Surges on Spain Budget News, Ideas of Fresh China Stimulus
Thursday September 27, 2012 1:51 PM
Comex gold futures ended the U.S. day session sharply higher and near the daily high Thursday. The precious metals made a midday surge, to extend earlier price gains, on news that Spain's government announced its budget plan will meet deficit targets this year, which the market place greeted with approval. Meantime, growing optimism that China will further stimulate its economy following a big central bank injection of liquidity into China's financial system earlier Thursday also helped to give the precious metals markets a boost. December gold last traded up $26.90 at $1,780.70 an ounce. Spot gold was last quoted up $25.80 an ounce at $1,779.50. December Comex silver last traded up $0.79 at $34.73 an ounce.
At mid-morning gold and silver futures extended what were only modest early gains in the wake of surprisingly weak U.S. economic data that was issued by the government. U.S. durable goods orders fell a whopping 13% in August, while the latest estimate for second-quarter U.S. gross domestic product saw the growth rate shaved by 0.4%, to just 1.3% growth.
The U.S. dollar index was weaker in early trading Thursday, but then saw downside price pressure increase following the weak U.S. economic data and after Spain’s budget announcement. The Euro currency rallied in the wake of the Spanish budget news, which put further selling pressure on the U.S. dollar. The U.S. dollar bears have the overall near-term technical advantage. Meantime, Nymex crude oil prices traded sharply higher Thursday, on some short covering and on the weaker dollar and Spain news. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.
The London P.M. gold fixing is $1,763.00 versus the previous P.M. fixing of $1,744.75.
Technically, December gold futures prices closed near the session high Thursday and were boosted by fresh technical buying as the end of the month and end of the quarter occurs on Friday. Gold bulls still have the solid overall near-term technical advantage and regained some fresh upside momentum Thursday. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the 20012 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 Thursday’s high of $1,782.90 and then at the September high of $1,790.00. First support is seen at $1,775.00 and then at $1,768.00. Wyckoff’s Market Rating: 7.5
December silver futures prices closed nearer the session high Thursday and saw fresh technical buying. Silver bulls are in firm near-term technical command. Prices are in a nine-week-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 Thursday’s high of $34.815 and then at $35.00. Next support is seen at $34.50 and then at $34.00. Wyckoff's Market Rating: 7.5.
December N.Y. copper closed up 325 points at 374.25 cents Thursday. Prices closed near mid-range and saw short covering and bargain hunting. The key “outside markets” were bullish for the copper market Thursday as the U.S. dollar index was lower and crude oil prices were sharply higher. Copper bulls have the overall near-term technical advantage. Prices are in a two-month-old uptrend 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 Thursday’s high of 377.40 cents and then at this week’s high of 378.40 cents. First support is seen at 372.00 cents and then at Thursday’s low of 370.00 cents. Wyckoff's Market Rating: 6.0.
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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
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