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A.M. Kitco Metals Roundup: Comex Gold Lower Amid Firmer U.S. Dollar Index, Weaker Crude Oil Prices

(Kitco News) -Comex gold futures prices are trading moderately lower Thursday morning, on some profit-taking pressure from recent gains, and on selling pressure from a firmer U.S. dollar index and lower crude oil prices . Comex April gold last traded down $10.60 an ounce at $1,419.00. Spot gold last traded down $10.20 at $1,419.25.

The U.S. dollar index is trading moderately higher Thursday, on some short covering in a bear market and on reports that Spain had its credit rating downgraded by Moody's, which put pressure on the Euro currency. Dollar index bears still have the solid overall technical advantage, which continues to be and underlying overall bullish factor for the precious metals markets.

Crude oil prices are trading lower Thursday morning, but are still above $102.00 a barrel. There have been no fresh, major developments in the Middle East this week, as traders Thursday decided to focus more on the plentiful supplies of crude oil presently in the U.S. However, traders are still closely watching the price of crude oil as a gauge of the tensions in the Middle East. Some analysts believe a United Nations-established "no fly" zone over Libya could put serious downside price pressure on crude oil, which would also likely pressure the gold market.

Traders are still buzzing about Wednesday's news that the "bond king" PIMCO fund is in the process of dumping all of its U.S. government debt. PIMCO had been the world's largest fund holding of U.S. government securities. PIMCO head Bill Gross is worried about the U.S. deficit and U.S. financial problems. PIMCO's move to dump U.S. debt can be viewed by gold market bulls as bullish, due to the implications of huge government deficits weakening the value of the U.S. dollar and the financial and economic standing of the U.S. in the world arena, in general. However, part of Gross's reason for dumping U.S. securities is that he believes the Federal Reserve will become less accommodative in monetary policy in the coming months, including the specter of rising interest rates, to fight inflationary price pressures. That can be viewed as bearish for the precious metals and bullish for the U.S. dollar.

If recent history once again plays out, significant price dips in the precious metals prices will become bargain-hunting buying opportunities for traders.

U.S. economic data due for release Thursday includes the weekly jobless claims report, Treasury receipts and outlays, and the international trade in goods and services report.

The London A.M. gold fixing was $1,424.25 versus the previous P.M. fixing of $1,431.00.

Technically, the gold market bulls have the solid overall technical advantage as prices hit a fresh all-time high of $1,445.70 Monday and are now just experiencing a corrective pullback. Gold prices are still in a six-week-old uptrend on the daily bar chart. However, this uptrend would be in jeopardy if prices see stronger selling pressure on Thursday or Friday. Gold bulls' next near-term upside technical objective is to produce a close above solid technical resistance at the all-time high of $1,445.70. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,400.00. First resistance is seen at $1,425.00 and then at the overnight high of $1,431.80. Support is seen at the overnight low of $1,415.30 and then at $1,410.00.

May Comex silver futures last traded down 77.2 cents at $35.275 an ounce Thursday morning, on profit-taking pressure after prices hit a fresh 31-year high of $36.745 on Monday. Silver bulls still have the solid overall near-term and longer-term technical advantage. Prices are in a steep six-week-old uptrend on the daily chart. The next downside price breakout objective for the silver bears is closing prices below solid technical support at $34.00. Bulls' next upside price objective is producing a close above solid technical resistance at this week's high of $36.745 an ounce. First support is seen at $35.00 and then at $34.50. Next resistance is seen at $35.50 and then at $36.00.

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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