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P.M. Kitco Roundup: Gold Ends Lower On Better U.S. Economic Data, More Technical Selling

Thursday June 12, 2013 2:22 PM

(Kitco News) - Comex gold futures prices ended the U.S. day session moderately lower Thursday, pressured by some better-than-expected U.S. economic reports issued in the morning, and by more chart-related selling pressure. Comex August gold last traded down $15.20 at $1,376.80 an ounce. Spot gold was last quoted down $10.80 at $1,378.00. July Comex silver last traded down $0.236 at $21.56 an ounce.

Gold prices were modestly lower during the overnight session and then extended those losses to hit the daily low when some mildly stronger-than-expected U.S. economic data was released. Weekly jobless claims were not as high as expected and retail sales also came in a bit better than expected. The data gave a lift to the U.S. stock market, which also was a negative for the precious metals.

In overnight trading, Japan’s Nikkei stock index moved into bear territory after dropping 6% on Thursday and is now down over 20% from last month’s high. The Japanese yen also hit a two-month high against the U.S. dollar. China’s Shanghai stock index hit a six-month low as Chinese investors returned from a public holiday. Other Asian and European stock markets were also lower Thursday.

The world market place continues to fret about the major central banks of the world taking away the easy-money punch bowl from the party. This week has seen some heightened risk aversion in the worldwide market place. Worrisome to traders and investors worldwide is not only the recent steep stock market declines in Asia, but also the sell-off in many periphery currencies in the foreign exchange market this week, along with recently rising government bond yields worldwide.

Traders and investors are worried that the bear market in Japan’s equities will soon spill over into the same for the U.S. stock market. Even the usual safe-haven assets have not been immune from this week’s “when in doubt, get out” trader mentality. Gold, the U.S. dollar index and U.S. Treasuries have all seen significant selling pressure this week. But the gold market is fickle during such times. It seems when investor anxiety moves from a medium boil toward a full boil, safe-haven demand does develop in the gold market. If the present trader and investor unease ratchets up a notch or two, I would not be surprised to see decent safe-haven demand move into gold.

The next major market event on the docket is next Wednesday’s Federal Reserve Open Market Committee (FOMC) meeting, at which time the U.S. central bank will discuss its current monetary policy and whether to make any changes to it. Fed Chairman Bernanke will also hold a press conference following that meeting.

The London P.M. gold fixing is $1,385.00 versus the previous P.M. fixing of $1,382.75.

Technically, August gold futures prices closed nearer the session low Thursday. Trading remains choppy on the daily chart. The gold bears still have the overall near-term technical advantage. Prices are in an eight-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 last week’s high of $1,423.30. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the May low of $1,338.00. First resistance is seen at Thursday’s high of $1,394.40 and then at $1,400.00. First support is seen at Thursday’s low of $1,373.00 and then at this week’s low of $1,364.50. Wyckoff’s Market Rating: 2.5

July silver futures prices closed nearer the session low Thursday. Silver bears have the solid overall near-term technical advantage. Prices are in an eight-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $20.25. First resistance is seen at $22.00 and then at $22.25. Next support is seen at this week’s low of $21.33 and then at $21.00. Wyckoff's Market Rating: 2.5.

July N.Y. copper closed down 375 points at 318.80 cents Thursday. Prices closed nearer the session low, scored a bearish “outside day” down on the daily bar chart and hit another fresh five-week low. Bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the 330.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of 304.25 cents. First resistance is seen at 320.00 cents and then at 322.50 cents. First support is seen at Thursday’s low of 316.05 cents and then at 315.00 cents. Wyckoff's Market Rating: 3.0.

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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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