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A.M. Kitco Metals Roundup: Comex Gold Firmer On Corrective Bounce From Thursday’s Losses

(Kitco News) - Comex February gold futures prices are trading modestly higher in Friday morning U.S. dealings. The precious metals are seeing a corrective upside bargain-hunting and short-covering bounce following solid losses suffered on Thursday. The general market place has stabilized from the late-Thursday EU jitters on some positively perceived news coming out of the European Union summit in Brussels. February gold last traded up $9.60 at $1,723.00 an ounce. Spot gold last traded up $12.10 an ounce at $1,718.50. March Comex silver last traded up $0.532 at $32.07 an ounce.

The latest news coming out of the European Union summit meeting in Brussels is that all but a few of the EU members have agreed to re-write some treaty rules to bolster the EU financial sector. The U.K. was a the main holdout. Important for the market place is also reports that Germany has indicated it is more open to providing funds to any mechanism implemented to get the EU debt crisis under control. The market place is perceiving the above developments as a step in the right direction and it's more of a "risk on" trading day so far Friday. That's bullish for the precious metals. Remember that gold has been acting more like a risk asset in recent weeks, and less like a safe-haven investment asset.

Keep in mind that the tenor of the market place can change very quickly when it comes to fresh EU debt crisis developments. It's also likely that at some point in the not-too-distant future gold will once again be perceived by most investors as a safe-haven asset, instead of a risk asset. Remember the old, and true, market adage: Markets can and will do anything and everything possible to frustrate the largest number of traders. It seems gold has been adhering to this old saying recently.

The U.S. dollar index is weaker Friday morning and that's a slight positive factor for the precious metals. However, the dollar index bulls still have the overall near-term technical advantage. Crude oil prices are trading near unchanged Friday morning. Crude has been and will continue to be an important "outside market" for the precious metals.

U.S. economic data due for release Friday includes the U.S. trade deficit report and the University of Michigan consumer sentiment survey.

The London A.M. gold fixing was $1,712.00 versus the previous P.M. fixing of $1,715.00.

Technically, February gold futures bulls still have the overall near-term technical advantage, but they did fade on Thursday and need to show fresh power soon. A 10-week-old uptrend is still in place on the daily bar chart, but just barely. Bulls' next upside technical breakout objective is to produce a close above solid technical resistance at last week's high of $1,767.10. Bears' next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at the overnight high of $1,727.90 and then at $1,740.00. First support is seen at the overnight low of $1,704.90 and then at $1,700.00.

March silver futures have been trading sideways on the daily chart for three weeks as bulls and bears struggle for near-term technical control. Bulls' next upside price breakout objective is closing prices above solid technical resistance at $34.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of $30.74. First resistance is seen at the overnight high of $32.25 and then at $32.50. Next support is seen at this week's low of $31.42 and then at $31.00.

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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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