Markets

A.M. Kitco Metals Roundup: Comex Gold Firmer, Silver Pushes Above $25.00, on Weak U.S. Dollar

Comex gold prices are trading modestly higher Monday morning, while silver futures have pushed to a fresh 30-year high above $25.00 an ounce. The U.S. dollar index is again seeing some selling pressure Monday, which has supported fresh buying interest in the precious metals. December Comex gold last traded up $3.80 at $1,361.40 an ounce. Spot gold was last quoted up $1.30 at $1,361.50.

The U.S. dollar index is trading modestly lower Monday morning. The dollar index remains technically and fundamentally weak, which has been and continues to be bullish for the precious metals.

Traders are anxiously awaiting the Federal Reserve's FOMC meeting that takes place on Tuesday and Wednesday. It's generally believed in the market place that the Fed will on Wednesday afternoon announce a fresh quantitative easing measure to help stimulate the U.S. economy. The focus among many traders recently has been the size of the expected "QE" package from the Fed. Talk now is that the package will start out at around $500 billion.

Many market veterans believe the "QE" is already mostly factored into many markets' price structures, including the currency markets. Thus, don't be surprised if the markets show a muted reaction to Wednesday's expected QE announcement from the Fed. In fact, the U.S. dollar index could see an upside bounce on a "sell the rumor, buy the fact" phenomenon that occurs in markets when an event is highly anticipated by traders.

Also helping to support buying interest in gold and silver Monday were comments from China commerce officials overnight, reportedly saying inflation is rising in emerging markets and that commodity prices will remain high in the coming months. The China officials also said crude oil and gold are becoming de facto currency reserves for some countries.

U.S. economic data due for release Monday includes personal income and outlays, the ISM manufacturing report on business and construction spending.

The London A.M. gold fixing was $1,361.50 versus the previous London P.M. fixing of $1,346.75.

From an important technical perspective, gold bulls have the overall near-term and longer-term technical advantage and have just recently regained some upside near-term technical momentum, following a bullish weekly high close on Friday.

Gold bulls' next near-term upside technical objective is to produce a close above solid technical resistance at the all-time record high of $1,388.10. Bears' next near-term downside price objective is closing prices below solid technical support at $1,315.60. First resistance is seen at the overnight high of $1,366.40 and then at $1,370.00. Support is seen at $1,350.00 and then at $1,345.00. Today's near-term Fibonacci support/resistance level: $1,361.00.

December silver futures last traded up 33.6 cents at $24.90 an ounce Monday morning. Prices hit a fresh 30-year high of $25.055 overnight. Silver bulls have the solid overall near-term technical advantage. The bulls have recently regained good upside near-term technical momentum. The next downside price objective for the bears is closing prices below solid technical support at $23.50. Bulls' next upside price objective is producing a close above solid technical resistance at $26.00 an ounce. First resistance is seen at the overnight high of $25.055 and then at $25.25. Next support is seen at the overnight low of $24.705 and then at $24.50. Today's near-term Fibonacci support/resistance level: $24.21.

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 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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