P.M. Kitco Metals Roundup: Comex Gold Rallies on Weak U.S. Economic Data, Flirts with All-Time High

17 June 2010, 1:36 p.m.
By Jim Wyckoff
Of Kitco News www.kitco.com

Comex gold futures closed solidly higher, near the session high and came close to last week's all-time record high on Thursday. Weak U.S. economic data pushed the U.S. dollar index and stock indexes lower, and rallied the Euro currency, which in turn lent to fresh buying interest in gold. Price action Thursday suggests traders are resuming notions that a weaker U.S. dollar is a supportive factor for gold. Such had been the case until the European Union debt crisis rattled the world's market structure.  August Comex gold closed up $18.00 an ounce at $1,248.50. Spot gold last traded up $16.60 at $1,247.50.

The U.S. Labor Department reported that initial jobless claims rose by 12,000 in the latest week, which was higher than expected. The Philadelphia Federal Reserve's manufacturing survey also showed a surprisingly large drop in the latest monthly report on Thursday. The gold market extended its early price gains following this fresh U.S. economic data.

Earlier Thursday, traders in Asia and Europe had expected gold to get a pop higher following what were expected to be dour results from a Spanish bond auction. However, that auction had better demand than traders were expecting. Still, the overall EU debt situation will continue to be an underlying bullish factor for gold that will limit the downside for the metal in the coming weeks.

Technically, August Comex gold futures gold bulls have the solid overall near-term technical advantage and gained fresh upside momentum today. There are no solid early technical clues to suggest a market top is close at hand. Prices are in a four-month-old uptrend on the daily bar chart. Bulls' next upside technical objective is to produce a close above solid chart resistance at the all-time high of $1,254.50. Bears' next downside price objective is closing prices below technical support at the last "reaction low" on the daily bar chart, which is now $1,216.20. First resistance is seen at the record high of $1,254.50 and then at $1,260.00. Support is seen at $1,240.00 and then at Thursday's low of $1,231.00. Wyckoff's Market Rating: 8.5.

July silver futures closed up 31.4 cents at $18.755 an ounce Thursday. Prices closed nearer the session high, hit a fresh four-week high and scored a bullish "outside day" up on the daily bar chart. The silver bulls have the overall near-term technical advantage and gained fresh upside technical momentum Thursday. The next downside price objective for the bears is closing prices below solid technical support at the last "reaction low" of $17.905. Bulls' next upside price objective is closing prices above solid technical resistance at the May high of $19.845 an ounce. First resistance is seen at Thursday's high of $18.88 and then at $19.00. Next support is seen at $18.50 and then at Thursday's low of $18.315. Wyckoff's Market Rating: 7.5.

July N.Y. copper closed down 900 points at 290.55 cents Thursday. Prices closed near the session low and were pressured by weaker U.S. economic data and ideas that China has a copper surplus, at present. Copper prices are still in a two-month-old downtrend on the daily bar chart. Bears Thursday regained some downside technical momentum. The next downside price objective for the bears is closing prices below solid technical support at the June low of 272.00 cents. Bulls' next upside objective is pushing and closing prices above solid technical resistance at 318.70 cents. First resistance is seen at 295.00 cents and then at 297.50 cents. First support is seen at Thursday's low of 288.95 cents and then at 285.00 cents. Wyckoff's Market Rating: 3.0.

 

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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