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A.M. Kitco Metals Roundup: Comex Gold Firmer On Bargain Hunting, But Stronger U.S. Dollar, Weaker Crude Oil Limit Upside

(Kitco News) - Comex December gold futures prices are trading slightly higher early Friday. Some bargain hunting and short covering are featured on this last trading day of the month and of the quarter. Gains in gold are being curtailed by a firmer U.S. dollar index and lower crude oil prices . December gold last traded up $3.80 an ounce at $1,621.10 an ounce. Spot gold last traded up $4.20 an ounce at $1,620.50. December Comex silver last traded down $0.162 at $30.36 an ounce.

U.S. and European stock markets are weaker Friday. While sentiment in the market place this week has been that the European Union sovereign debt situation may be a improving just a bit, or at least is not deteriorating further, the overall situation is still gold-market-bullish. And while the German government passed a motion to increase the funding facility for bailing out the debt-strapped nations of the EU--namely Greece--there are reports late this week that protesters in Greece are becoming more active. While the market place has temporarily moved the EU debt crisis off the front burner and is focusing on other matters, such as fresh economic reports, it likely won't be long until the EU debt crisis moves from a simmer to a boil again. This does favor the gold market bulls' argument that present price levels of the precious yellow metal are likely a value-buying opportunity.

Reports this week of good physical demand for gold from Asia are also limiting the downside in gold.

The U.S. dollar index is trading higher Friday morning and is back near this week's six-month high. The dollar index bulls have the overall near-term technical advantage, which has been a major underlying bearish factor for the precious metals recently.

Crude oil futures prices are trading lower Friday. Trading in crude has turned choppy, which now suggests more of the same for crude. Still, crude oil remains a leader in the raw commodity sector. Any bigger moves in the price of crude oil would likely impact most commodity markets, including the precious metals.

U.S. economic data due for release Friday includes personal income and outlays, the ISM New York business survey, the ISM Chicago business survey and the University of Michigan consumer sentiment survey.

The London A.M. gold fixing was $1,629.00 versus the previous P.M. fixing of $1,613.00.

Technically, December gold futures have seen serious near-term technical damage inflicted recently. Prices are still in a steep three-week-old downtrend on the daily bar chart. Bulls' next upside technical objective is to produce a close above solid technical resistance at $1,705.40. Bears' next near-term downside price objective is closing prices below strong technical support at this week's low of $1,535.00. First resistance is seen at the overnight high of $1,642.50 and then at $1,650.00. First support is seen at $1,600.00 and then at Thursday's low of $1,585.00.

December silver futures have seen serious near-term and longer-term chart damage inflicted recently. Prices are in a six-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is producing a close above strong technical resistance at this week's high of $33.585 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week's low of $26.15. First resistance is seen at the overnight high of $31.335 and then at Thursday's high of $31.535. Next support is seen at $30.00 and then at $29.50.

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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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