A.M. Kitco Metals Roundup: Comex Gold Steady-Weak, Hits Fresh 3-Month Low; U.S. GDP Awaited


(Kitco News) -Comex gold futures prices are trading at steady to weaker price levels Friday morning. Prices fell to another three-month low overnight amid the yellow metal's near-term weak technical posture due to a lack of fresh safe-haven demand. Traders are awaiting Friday morning's U.S. gross domestic product report. Comex gold last traded down $2.40 at $1,316.00 an ounce. Spot gold last traded up $0.10 at $1,315.50.

Gold market traders are awaiting this morning's U.S. gross domestic product report. Any stronger-than-expected reading could put additional downside pressure on gold due to investor risk appetite increasing. Forecasts call for Friday morning's U.S. GDP figure to show a rise of 3.5% in the fourth quarter. The U.S. GDP report is getting extra attention due to the U.K.'s GDP report that earlier this week showed a surprising contraction in economic growth.

With the U.S. stock indexes trading near multi-year highs, no major headline news regarding European Union financial problems, and no major geopolitical flare-ups occurring, investors worldwide have gained a better appetite for risk, which is hampering the safe-haven gold market. Reports overnight said the world's largest gold exchange traded fund ( ETF ), SPDR Gold Trust, said Thursday its holdings fell to an eight-month low, at down 34 tons, or down 2.7%.

However, the gold market is still just one step away from a solid price rebound or an extended rally should a significant geopolitical or financial market event suddenly and unexpectedly appear in the news headlines. Also, gold traders are wondering when the market will see a corrective upside bounce, which is now due.

The U.S. dollar index is trading steady to weaker again Friday morning, as currency traders also await the U.S. GDP data. Prices Thursday hit a fresh 2.5-month low. The dollar index bears have downside near-term technical momentum and if the index remains on a downward path in the near term, look for gold prices to at least see limited selling interest. Gold bulls have been disappointed recently that the yellow metal has not seen more upside support from the weaker dollar index.

U.S. economic data due for release Friday includes fourth-quarter gross domestic product, the employment cost index and the University of Michigan consumer sentiment survey.

The London A.M. gold fixing was $1,316.00 versus the previous P.M. fixing of $1,334.50.

Technically, serious near-term technical damage has been inflicted in gold recently as prices hit a fresh three-month low Friday morning. Prices are in a steep four-week-old downtrend on the daily bar chart. A bearish head-and-shoulders top reversal pattern is also playing out on the daily bar chart for February Comex gold.

Gold market bulls do still have the overall longer-term technical advantage. A 10-year-old uptrend is in place on the longer-term charts. Nearby Comex gold futures prices could drop below $1,200.00 an ounce before any significant longer-term technical damage would start to be inflicted to then suggest that a major market top is in place.

Gold bulls' next near-term upside technical objective is to produce a close above solid technical resistance at this week's high of $1,352.40. Bears' next near-term downside price objective is closing prices below psychological support at $1,300.00. First resistance is seen at $1,320.00 and then at $1,325.00. Support is seen at the overnight low of $1,307.70 and then at $1,300.00.

March silver futures last traded down 23.6 cents at $26.795 an ounce Friday morning. Prices hit a fresh 2.5-month low overnight. Silver prices are also in a four-week-old downtrend on the daily bar chart. Significant near-term chart damage has occurred in silver recently. Silver bulls also do still have the overall longer-term technical advantage.

The next downside price objective for the silver bears is closing prices below solid technical support at $26.00. Bulls' next upside price objective is producing a close above solid technical resistance at this week's high of $27.95 an ounce. First support is seen at the overnight low of $26.30 and then at $26.00. Next resistance is seen at the overnight high of $27.035 and then at $27.50.

By Jim Wyckoff of Kitco News; jwyckoff@kitco.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Commodities

Referenced Stocks: ETF



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