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P.M. Kitco Metals Roundup: Gold Ends Modestly Up on Short Covering, Bargain Hunting, Safe-Haven Demand

Thursday December 27, 2012 2:10 PM

Comex gold futures prices ended the U.S. day session modestly higher in thin holiday dealings Thursday. Some short covering and bargain hunting, and even some fresh safe-haven demand, lifted the yellow metal. February gold last traded up $3.40 an ounce at $1,664.10. Spot gold was last quoted up $4.00 at $1,664.00.  March Comex silver last traded up $0.17 at $30.205 an ounce.

Many traders and investors are on the sidelines this week, enjoying the holiday season. That is making for thin market conditions.

Investors and traders continue to worry about the U.S. fiscal cliff negotiations that have stalled and now with only a few days left for U.S. lawmakers to reach a deal. President Obama did come back from his Hawaii vacation early. However, there was no progress on the matter as of Thursday afternoon. That did prompt some mild safe-haven demand for gold Thursday. U.S. lawmakers have until January 3 to come to agreement before the government falls off the fiscal cliff. Markets do not like uncertainty and most markets remain jittery as the deadline draws closer.

Some slightly better U.S. economic data released Thursday provided little fresh impetus to the precious metals markets, or any of the other markets for that matter.

In overnight news, the Japanese stock market rallied to a nearly two-year high on hopes for more monetary policy stimulus coming from the Bank of Japan. European stock markets were firmer, helped in part by a successful auction of Italian bonds and better Italian manufacturing data.

The U.S. dollar index was lower early Thursday but then rebounded to trade slightly up by the close. The index last week hit a three-month low and the greenback bears still have the solid overall near-term technical advantage. Meantime, Nymex crude oil futures prices were slightly lower Thursday on some mild profit taking after hitting a fresh nine-week high overnight. The crude oil bulls have gained fresh upside near-term technical momentum following Wednesday’s big gains. The present posture of these two key “outside markets” makes me suspect some fresh buying interest could soon surface for gold and silver markets.

The London P.M. gold fix was $1,655.50 versus the previous P.M. fixing of $1,651.50.

Technically, February gold futures prices closed nearer the session high Thursday. But the gold bears still have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the November low of $1,674.70. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,630.00. First resistance is seen at this week’s high of $1,668.70 and then at 1,674.70. First support is seen at this week’s low of 1,650.60 and then at $1,640.00. Wyckoff’s Market Rating: 3.5

March silver futures closed prices closed near mid-range Thursday. Short covering and bargain hunting were also featured. The silver bears still have the near-term technical advantage. Prices are in a steep four-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $32.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $29.00. First resistance is seen at Thursday’s high of $30.53 and then at $30.79. Next support is seen at last week’s low of $29.635 and then at $29.50. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed up 45 points at 360.20 cents Thursday. Prices closed near mid-range. Copper bulls and bears are back 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 December high of 372.10 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of 352.30 cents. First resistance is seen at Wednesday’s high of 361.30 cents and then at 365.00 cents. First support is seen at Thursday’s low of 358.95 cents and then at 356.00 cents. Wyckoff's Market Rating: 5.0.

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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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