Comex gold prices are trading higher Friday morning and have
scored another fresh all-time record high overnight, at $1,319.30
an ounce, basis the December futures contract. A swooning U.S.
dollar and strong investment and technically related demand
continue to push gold to new heights. December Comex gold last
traded up $6.60 an ounce at $1,316.20. Spot gold was last quoted up
$5.70 at $1,315.75.
The U.S. dollar index hit another fresh 8.5-month low Friday.
The greenback has been under pressure for several days, in the wake
of the recent intimation from the Federal Reserve that a fresh
round of quantitative easing of monetary policy is in the offing.
Some better-than-expected U.S. economic data this week has not
helped out the dollar bulls. The U.S. dollar index remains
technically weak. There are still no early technical clues that the
index is near a market bottom. With the dollar index in an overall
price downtrend on the charts, gold will continue to see buying
interest among those investors who view any currency instability as
worrisome and in turn seek out the safe-haven asset gold.
There seems to be more and more prognosticators saying the gold
market has risen too far, too fast and that a market top is close
at hand. Some try to rationalize that gold's market fundamentals
don't justify its present high price. Gold market bulls should
actually interpret the increasing number of such statements as
bullish. There's an old market adage that has proven prescient many
times: "Markets will do anything and everything possible to
frustrate the largest number of traders." The latest example of
such was the significant crowd of market watchers who reckoned the
U.S. stock market would swoon during September, when in fact the
stock indexes confounded that crowd by producing their best showing
in 70 years.
U.S. economic data due out Friday includes personal income and
outlays, the University of Michigan consumer sentiment survey,
construction spending and the ISM manufacturing report.
The London A.M. gold fixing was $1,313.00 versus the previous
London P.M. fixing of $1,307.00.
For this long-time market watcher, the key for the gold market
(and all other markets) has been and will continue to be price
trend. The shorter-term and longer-term price trends in the gold
market have been and continue to be up. Until the up-trends in the
gold market are negated on the price charts, the path of least
resistance for the price of gold will continue to be sideways to
higher.
Indeed, gold futures bulls have the strong overall near-term and
longer-term technical advantage and have gained more upside
momentum this week. There are still no early technical clues to
hint that a market top is close at hand in gold.
Bulls' next near-term upside technical objective is to produce a
close above psychological resistance at $1,325.00 in December gold.
Bears' next near-term downside price objective is closing prices
below solid technical support at this week's low of $1,276.20.
First resistance is seen at the overnight all-time record high of
$1,319.30 and then at $1,325.00. Support is seen at the overnight
low of $1,307.30 and then at $1,300.00. Today's near-term Fibonacci
support/resistance level: $1,303.00.
Comex silver futures are higher Friday as prices hover near this
week's fresh 30-year high. December silver last traded up 13.4
cents at $21.955 an ounce.
Silver bulls still have the solid near-term technical advantage
at present. Prices are in a steep five-week-old uptrend on the
daily bar chart. There are still no early technical clues to
suggest a market top is close at hand. The next downside price
objective for the bears is closing prices below solid technical
support at $21.00. Bulls' next upside price objective is producing
a close above solid technical resistance at $22.50 an ounce. First
resistance is seen at the overnight high of $22.05 and then at this
week's high of $22.125. Next support is seen at the overnight low
of $21.725 and then at $21.645. Today's near-term Fibonacci
support/resistance level: $21.73.
By Jim Wyckoff, contributing to Kitco News;
jwyckoff@kitco.com