Editor's note: Catch the Latest Happenings with Kitco Video News!
P.M. Kitco Metals Roundup: Gold Slumps Again on More Technical Selling Pressure, Firmer U.S. Dollar Index
Thursday February 28, 2013 1:53 PM
(Kitco News) - Gold futures prices ended solidly lower and near the daily low Thursday. The market extended moderate early losses in late-morning trading as the U.S. dollar index moved higher on the day. Serious near-term chart damage has been inflicted in gold recently. That chart damage has invited fresh speculative selling interest, including the past two days. April gold futures came close to seeing a bearish monthly low close on Thursday. Gold futures prices also posted declines for the fifth straight month as February draws to a close--the first time that has happened since 1997. April Comex gold last traded down $17.10 at $1,578.60 an ounce. Spot gold was last quoted down $17.20 at $1,579.50. May Comex silver last traded down $0.52 at $28.465 an ounce.
The U.S. government’s likely inability to agree on a taxing and spending plan by the March 1 sequestration deadline on Friday is being mostly ignored in the world market place late this week, as the U.S. stock market rallied sharply Wednesday amid a “risk-on” trader and investor mentality. Such is attracting investor interest in other assets than safe-haven gold late this week. U.S. stock index futures were trading modestly higher Thursday on some follow-through buying strength. President Obama will meet with congressional leaders Friday on the budget matters. Traders and investors are becoming somewhat numb to the ongoing squabbling in Washington, D.C.
The European Union and its sovereign debt problems have surfaced again this week. The Italian elections failed to show a clear winner as voters ostensibly rebuked present government austerity measures. The head of the Organization for Economic Cooperation and Development (OECD) said Thursday the Italian election gridlock will not significantly impact the EU debt crisis and efforts to stabilize it. There were Italian government debt auctions Tuesday and Wednesday that were deemed successful, even though yields were a bit higher. On Thursday, Spanish and Italian bond yields fell slightly, in another positive sign the EU debt crisis is now stable. The latest episode in the EU debt crisis appears to be calming down just a bit as the week progresses. European Central Bank chief Mario Draghi said Thursday he will continue to “preserve the integrity” of the Euro currency. European stock markets were mostly higher Thursday on better corporate earnings reports coming out of Europe. The seemingly improved attitudes in the market place, regarding the EU debt crisis, are also an underlying bearish factor for the safe-haven gold market late this week.
The U.S. dollar index was higher Thursday and hovering near a six-month high. The U.S. dollar bulls have upside technical momentum to suggest the dollar index has put in a market bottom. That’s bearish for gold and silver. Meantime, Nymex crude oil futures prices traded near steady Thursday. Prices Tuesday hit a two-month low. The crude oil bears still have some downside near-term technical momentum and that’s also a negative for gold and silver.
The London P.M. gold fixing is $1,588.50 versus the previous London P.M. fixing of $1,604.25.
Technically, April gold futures prices closed nearer the session low again Thursday as the bears tighten their near-term grip on the yellow metal. Gold prices are in a six-week-old downtrend on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,619.70. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the February low of $1,554.40. First resistance is seen at $1,590.00 and then at $1,600.00. First support is seen at Thursday’s low of $1,574.30 and then at $1,570.00. Wyckoff’s Market Rating: 3.0
May silver futures prices closed nearer the session low Thursday and closed at a fresh monthly low close, which is another bearish clue. May silver bears have the near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $29.495 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of $28.315. First resistance is seen at $28.75 and then at $29.00. Next support is seen at Thursday’s low of $28.40 and then at $28.315. Wyckoff's Market Rating: 3.0.
May N.Y. copper closed down 195 points at 354.75 cents Thursday. Prices closed near the session low and closed at a bearish monthly low close. Prices Tuesday hit a three-month low. Copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 365.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at 357.50 cents and then at 360.00 cents. First support is seen at this week’s low of 353.35 cents and then at 350.00 cents. Wyckoff's Market Rating: 3.5.
Follow me on Twitter to immediately get the very latest market developments. If you are not on board, then you are not getting key analysis and perspective as fast or as often as you could! Follow me on Twitter to get my very timely intra-day and after-hours briefs on precious metals price action. The precious markets will remain very active. If you want market analysis fast, and in after-hours trading, then follow my up-to-the-second precious metals market perspective on Twitter. It's free, too. My account is @jimwyckoff.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
 |
Discuss on Kitco Forums
