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A.M. Kitco Metals Roundup: Gold Solidly Up as Bulls Continue to Gain Technical Momentum

Monday April 29, 2013 8:16 AM

(Kitco News) - Comex gold futures are posting good price gains in early U.S. trading Monday. The bulls are continuing to repair recent chart damage and have gained upside near-term technical momentum. The key “outside markets” are also in a bullish posture for the precious metals to start the new trading week, as the U.S. dollar index is lower and crude oil prices are firmer. June Comex gold last traded up $22.00 at $1,475.60 an ounce. Spot gold was last quoted up $12.50 at $1,476.50.  July Comex silver last traded up $0.577 at $24.365 an ounce.

In overnight news, Italian bond yields fell to a 2.5-year low at the latest 10-year bond auction as investors embraced the new Italian coalition government. A German short-term government debt auction Monday saw funding costs at the lowest level since November, at virtually zero return for the debt buyers. This underscores the keener European investor uncertainty regarding the overall health of the European Union. Euro zone business confidence declined in April, it was reported Monday, in the latest dour economic data coming out of the EU. The European Central Bank holds its monthly meeting on Thursday, with the market place anxiously awaiting its outcome. Many market watchers think the ECB will lower interest rates at Thursday’s gathering. The Federal Reserve on Wednesday will announce its latest monetary policy actions in a busy week of world economic data. The monthly U.S. jobs report is due out Friday morning.

The U.S. dollar index is lower Monday morning on profit taking from recent gains. The greenback bulls still have the overall near-term technical advantage, but are fading and need to show fresh power soon to keep their near-term technical edge. Meantime, Nymex crude oil futures prices are firmer early Monday. Crude oil bulls have gained good upside near-term technical momentum recently, which is a bullish underlying factor for the raw commodity sector, including the precious metals.

U.S. economic data due for release Monday includes personal income and outlays, the Chicago Fed Midwest manufacturing index, pending home sales, and the Texas manufacturing outlook survey.

The London A.M. gold fix is $1,472.50 versus the previous P.M. fixing of $1,471.50.

Technically, June gold futures bears still have the overall technical advantage. However, the bulls have gained good upside near-term technical momentum recently and are repairing the recent chart damage, to suggest a near-term market low is in place. But gold bulls still have more work to do to suggest prices can sustain a near-term uptrend on the daily chart. Gold prices are still in a seven-month-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 $1,500.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,400.00. First resistance is seen at last week’s high of $1,484.80 and then at $1,500.00. First support is seen at the overnight low of $1,461.60 and then at $1,450.00.  

July silver futures bears still have the overall near-term technical advantage. Silver prices are in a seven-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $23.00. First resistance is seen at $24.50 and then at last week’s high of $24.835. Next support is seen at the overnight low of $23.945 and then at Friday’s low of $23.62.

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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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