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A.M. Kitco Metals Roundup: Comex Gold Firmer on Bargain Hunting

(Kitco News) - Comex December gold futures prices are trading modestly higher in early U.S. trading Friday. Prices hit a fresh three-week low overnight. Some bargain-hunting buying interest is featured following sharp losses recorded on Thursday. This week has seen more of a "risk on" trader and investor mentality in the world market place, as evidenced by stabilizing world stock markets. That's still bearish for the safe-haven gold market. Importantly, the market place appears to be viewing, at least temporarily, the European Union debt crisis as de-escalating. December gold last traded up $8.30 an ounce at $1,789.70 an ounce. Spot gold last traded down $3.00 an ounce at $1,787.25. December Comex silver last traded up $0.679 at $40.18 an ounce.

The European Union sovereign debt situation is being addressed by EU finance ministers, heads of state and even the U.S. Treasury secretary this week. Five major central banks, including the U.S. Federal Reserve, moved on Thursday to pump U.S. dollars into the EU financial system. While the EU debt crisis is far from resolved, the measures taken this week may have seen the crisis "turn the corner" and it may be getting better rather than getting worse. Or, at least traders may have now factored into markets' price structures all the EU bad news, and expected bad news. This scenario has worked to limit safe-haven demand for gold this week.

The U.S. dollar index is trading firmer Friday. The greenback bulls still have the near-term technical advantage after prices hit a fresh six-month high earlier this week. The recently improved technical posture of the U.S. dollar index has been an underlying bearish factor for the precious metals.

Crude oil futures prices are trading slightly lower Friday. Crude oil bulls still have a bit of upside momentum this week as prices Wednesday hit a fresh five-week high. Crude oil will remain an important "outside market" that will influence the precious metals markets.

U.S. economic data due for release Friday includes Treasury international capital flows data and the University of Michigan consumer sentiment survey.

The London A.M. gold fixing was $1,778.00 versus the previous P.M. fixing of $1,782.00.

Technically, December gold futures saw no serious chart damage inflicted with Thursday's losses. But the bulls do not want to see follow-through selling pressure on Friday to produce a bearish weekly low close and raise the specter of a bearish double-top reversal pattern forming on the daily bar chart. At present, the gold market bulls still have the overall technical advantage. Bulls' next upside technical objective is to produce a close above solid technical resistance at this week's high of $1,865.20. Bears' next near-term downside price objective is closing prices below solid technical support at $1,750.00. First resistance is seen at the overnight high of $1,793.90 and then at 1,800.00. First support is seen at Friday's low of $1,765.40 and then at $1,750.00.

December silver futures bulls still have the overall near-term technical advantage, but did fade Thursday and do not want to see a bearish weekly low close on Friday. A 10-week-old uptrend on the daily bar chart was at least temporarily negated Thursday. Bulls' next upside price objective is producing a close above strong technical resistance at this week's high of $41.60 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $38.81. First resistance is seen at the overnight high of $40.25 and then at $40.50. Next support is seen at Thursday's low of $39.40 and then at $39.00.

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By Jim Wyckoff, contributing to 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 Nasdaq, Inc.


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

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