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A.M. Kitco Metals Roundup: Comex Gold Higher on Bargain Hunting, Weaker U.S. Dollar Index

(Kitco News) - Comex December gold futures are trading higher Tuesday on bargain-hunting buying interest following selling pressure Monday. A weaker U.S. dollar index Tuesday is also supporting the precious metals. December gold last traded up $13.00 at $1,826.30 an ounce. Spot gold last traded up $8.80 an ounce at $1,823.75. December Comex silver last traded up $0.25 at $40.47 an ounce.

The European Union sovereign debt crisis is still in the headlines Tuesday morning. Worries about default on debt payments by Greece and rising Italian bond yields are the EU debt crisis worries of the moment on this day. There are unconfirmed reports that China is thinking about stepping in to buy some Italian debt, and that Germany and France may soon make a joint statement regarding Greece's debt. But still, there has been no major breakthrough regarding effectively dealing with Greece's debt. The Euro currency has been hammered and the U.S. dollar index has rallied as investors flee European Union assets. The EU debt crisis is still a major underlying bullish factor for gold and is prompting safe-haven demand for the metal.

The U.S. dollar index is trading weaker Tuesday, on a corrective pullback after hitting a fresh six-month high Monday. The greenback bulls still have some upside near-term technical momentum to suggest a price uptrend can be sustained. If the U.S. dollar index continues to trade sideways to higher, that would be a bearish underlying factor for the precious metals markets.

Crude oil futures prices are trading higher Tuesday, which is also bullish for gold and silver. Crude oil's recent price action hints prices will trade in a choppy range between $80 and $90 a barrel for the near term. Crude oil will remain an important "outside market" that will influence the precious metals markets.

U.S. economic data due for release Tuesday includes the NFIB small business index, the weekly Goldman Sachs chain store sales index, import and export prices, the weekly Johnson Redbook retail sales report and the monthly Treasury budget statement.

The London A.M. gold fixing was $1,806.00 versus the previous P.M. fixing of $1,834.00.

Technically, December gold futures bulls still have the solid overall technical advantage. Monday's sharp sell off did not produce any chart damage. Bulls' next upside technical objective is to produce a close above solid technical resistance at the all-time high of $1,923.70. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,793.80. First resistance is seen at the overnight high of $1,838.90 and then at 1,850.00. First support is seen at $1,800.00 and then at $1,793.80.

December silver futures bulls still have the overall near-term technical advantage, but did fade with solid losses on Monday. Prices are still in a choppy, 10-week-old uptrend on the daily bar chart. Bulls' next upside price objective is producing a close above strong technical resistance at the September high of $43.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $40.00. First resistance is seen at the overnight high of $41.09 and then at Monday's high of $41.60. Next support is seen at $40.00 and then at Monday's low of $39.75.

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By Jim Wyckoff contributing to Kitco News; jim@jimwyckoff.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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