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A.M. Kitco Metals Roundup: Comex Gold Lower on Profit Taking, Stronger U.S. Dollar Index

(Kitco News) - Comex December gold futures are trading lower Friday, on some profit-taking pressure from recent gains and heading into the weekend. A stronger U.S. dollar index and weaker crude oil futures prices are also helping to put some downside price pressure on the precious metals Friday. December gold last traded down $24.70 at $1,832.80 an ounce. Spot gold last traded down $39.50 an ounce at $1,830.50. December Comex silver last traded down $1.04 at $41.49 an ounce.

The market place showed little reaction to speeches Thursday by President Obama and Fed Chairman Bernanke. Traders were looking for fresh clues regarding what the U.S. government and central bank intend to do regarding the recent weakening of the U.S. economy. President Obama's jobs package was bigger than expected but still not a major market mover. And Bernanke did not get specific on any actions the Fed may take to jumpstart the U.S. economy.

The U.S. dollar index is trading higher again Friday. The greenback bulls have gained good upside near-term technical momentum recently, to suggest a major market low is now in place. 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 weaker Friday, which is also somewhat limiting buying interest in gold and silver. Crude oil's solid gains Wednesday do hint that 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.

The simmering European Union debt crisis that has not gone away is still a major underlying bullish factor for gold, as is the fact that most major industrial nations' central banks favor deflated currencies to try to resolve their debt problems.

U.S. economic data due for release Friday is light and includes wholesale trade inventories. There is a Group of Seven industrial countries meeting in France during the weekend.

The London A.M. gold fixing was $1,879.50 versus the previous P.M. fixing of $1,855.00.

Technically, December gold futures bulls on Thursday stepped up and bought the Wednesday dip to avoid any significant chart damage. The gold market bulls still have the solid overall technical advantage. 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 this week's low of $1,793.80. First resistance is seen at $1,850.00 and then at Thursday's high of 1,873.30. First support is seen at Thursday's low of $1,816.20 and then at $1,800.00.

December silver futures bulls still have the overall near-term technical advantage. Prices are still in a choppy, nine-week-old uptrend on the daily bar chart. Bulls' next upside price objective is producing a close above strong technical resistance at the August high of $44.295 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 $42.00 and then at $42.50. Next support is seen at Thursday's low of $41.285 and then at $41.00.

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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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