Gold Posts Moderate Gains On Short Covering, Bargain Hunting and Technical Buying (Kitco News) - Gold prices ended the U.S. day session moderately higher Wednesday, on a short-covering rebound in the futures market and on some perceived bargain-basement buying in the cash market. An improvement in the near-term technical posture of gold has also prompted some chart-based buying this week. February Comex gold was last up $8.70 at $1,208.10 an ounce. Spot gold was last up $10.30 at $1,209.25. March Comex silver last traded down $0.066 at $16.39 an ounce. The gold market also got a modest boost Wednesday morning when the U.S. ADP national employment report came out and did not quite meet market expectations. The figure showed a rise of 208,000 jobs in November, while the market place was expecting something in the range of up 230,000. The U.S. dollar index hit a four-year high Wednesday and the Euro currency fell to a two-year low against the greenback. This was an underlying negative for the precious metals markets today that did limit the upside. The latest European Union purchasing managers index (PMI) came in weaker than expected Wednesday, which pressured the Euro. The data firm Markit reported the said the composite EU PMI for November was 51.1 versus 52.1 in October. A reading above 50.0 suggests the sector is growing. The European Central Bank holds its monthly meeting Thursday. Many believe the ECB will not yet move to further stimulate EU monetary policy, but most think its coming. Recent economic data coming out of the European Union suggests the ECB will make its move in the first quarter of 2015. In other overnight news, the Russian central bank moved to intervene in the foreign exchange market Wednesday by selling U.S. dollars, in an effort to support the flagging ruble. However, as is usually the case, the central bank intervention had little impact as the ruble fell to a new record low versus the greenback. Plunging crude oil prices and Western sanctions against Russia have put the Russian economy into recession. Crude oil prices were stable Wednesday. Price action this week has been volatile on an intra-day basis, after prices fell to a five-year low of $63.72 early Monday, basis the January Nymex futures contract. The nosedive in crude oil prices in recent weeks has also been an underlying bearish factor for precious metals and the entire raw commodity sector. Traders and investors are also awaiting what is arguably the most important U.S. economic data point of the month: Friday’s employment situation report from the U.S. Labor Department. The London P.M. gold fix was $1,204.75 versus the previous London A.M. fixing of $1,203.25. Technically, February gold futures prices closed nearer the session high and saw short covering and bargain hunting today. Bears still have the overall near-term technical advantage. However, this week’s price action hints of a near-term market low being in place. But the bulls need to show more power soon to suggest a price uptrend can develop. 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 $1,221.00. Bears next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,163.90. First resistance is seen at today’s high of $1,215.00 and then at $1,221.00. First support is seen at $1,200.00 and then at $1,191.40. Wyckoff’s Market Rating: 3.0 March silver futures prices closed near mid-range. Price action Monday scored a bullish “key reversal” up on the daily bar chart, which suggests the bears have become exhausted and a market bottom is in place. The silver bears still have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $15.41. First resistance is seen at today’s high of $16.595 and then at this week’s high of $16.81. Next support is seen at today’s low of $16.235 and then at $16.00. Wyckoffs Market Rating: 3.0. March N.Y. copper closed down 210 points at 287.05 cents today. Prices closed nearer the session low. Prices Monday hit a contract and multi-year low. Monday’s price action suggests the bears became exhausted at the lower price levels. But right now the bears have the solid near-term technical advantage. Copper bulls next upside breakout objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at Monday’s contract low of 277.75 cents. First resistance is seen at today’s high of 289.65 cents and then at this week’s high of 291.70 cents. First support is seen at today’s low of 2.8605 cents and last week’s low of then at 284.35 cents. Wyckoffs Market Rating: 1.5. By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco
Posted on: Thu, 04 Dec 2014 08:02:25 +0000
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