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P.M. Kitco Metals Roundup: Gold Ends Weaker on More Profit Taking, Chart Consolidation, Firmer U.S. Dollar
Tuesday November 27, 2012 1:45 PM
(Kitco News) - Comex gold prices ended the U.S. day session modestly lower Tuesday. Gold and silver markets saw more mild profit taking and downside corrective technical action. A firmer U.S. dollar index was also a bearish outside market force working against the precious metals Tuesday. February gold last traded down $6.40 at $1,745.60 an ounce. Spot gold was last quoted down $6.40 at $1,743.50. March Comex silver last traded down $0.144 at $34.085 an ounce.
In overnight trading, the European stock markets rallied only modestly on news that Euro zone leaders meeting in Brussels agreed late Monday to disburse fresh bailout funds to cash-starved Greece. Most market watchers had reckoned EU leaders would grant new monies to Greece. The gist of the deal calls for Greece to cut its debt to 124% of GDP by 2020 and a reduction in the interest rate charged to Greece on the loans. The Euro currency also was initially supported on the Greece news but could not hold those gains as the day wore on. The world market place showed no significant reaction to the as-expected news on Greece.
A heavy slate of U.S. economic data released Tuesday did show generally better-than-expected readings overall, and that put modest upside pressure on the U.S. dollar index, which in turn helped push gold and silver prices to their daily lows.
Traders and investors are also focused on the negotiations among U.S. lawmakers and President Obama regarding the so-called “fiscal cliff” tax increases and spending cuts that are approaching. Congress is back from its Thanksgiving break, so there will likely be some more news on the fiscal cliff front this week, which could be market-sensitive.
Meantime, in the Middle East there are growing tensions in Egypt, as its president awarded himself major powers last week, and the public did not like it. Protesting in the streets is occurring this week. This situation bears close watching and if it escalates, it will more significantly impact markets.
The U.S. dollar index did rally on the upbeat U.S. economic data Tuesday but did hit a fresh three-week low overnight. Meantime, Nymex crude oil prices were slightly lower Tuesday. The crude oil bears still have the slight overall near-term technical advantage. The precious metals markets will continue to monitor these two key “outside markets” for clues on daily price direction.
The London P.M. gold fixing was $1,746.25 versus the previous P.M. fixing of $1,750.50.
Technically, February gold futures prices closed nearer the session low Tuesday. However, a three-week-old uptrend line is in place on the daily bar chart and gold bulls still have 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 October high of $1,800.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,700.00. First resistance is seen at last week’s high of $1,757.10 and then at $1,765.00. First support is seen at $1,741.30 and then at $1,730.00. Wyckoff’s Market Rating: 7.0
March silver futures prices closed nearer the session low Tuesday on profit taking and did hit another fresh seven-week high early on. A three-week-old uptrend is still in place on the daily bar chart and silver bulls have the solid overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $35.51 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $32.50. First resistance is seen at today’s high of $34.37 and then at $34.50. Next support is seen at Monday’s low of $33.98 and then at $33.75. Wyckoff's Market Rating: 7.0.
March N.Y. copper closed down 30 points at 354.55 cents Tuesday. Prices closed near mid-range and poked to another fresh three-week high. A firmer U.S. dollar index limited the upside in copper today. Copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 360.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of 341.45 cents. First resistance is seen at the November high of 357.65 cents and then at 360.00 cents. First support is seen at Monday’s low of 351.80 cents and then at 350.00 cents. Wyckoff's Market Rating: 4.0.
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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
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