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A.M. Kitco Metals Roundup: Comex Gold Near Steady, at 5-Week High; Silver Hits 30-Year High

(Kitco News) -Comex gold futures prices are trading near steady Friday morning in quieter trading, but did poke to a fresh five-week high overnight. Meantime, the silver market notched a fresh 30-year high overnight. The Middle East tensions appear to have at least temporarily calmed a bit and other markets are stable in the early going Friday. The bullish near-term technical postures of the gold and silver markets continue to invite fresh investor interest. Comex April gold last traded up $0.60 at $1,385.70 an ounce. Spot gold last traded up $0.20 at $1,385.50.

Reports overnight that China's monetary authorities have again raised the reserve requirement ratio for Chinese banks, by 50 basis points, is so far being taken in stride by the precious metals markets. The news does have a bearish undertone for commodity markets, however.

Gold prices have received buying support this week from some safe-haven demand due to Middle East turmoil that included protesting in Bahrain and Libya. Also, Iran has reportedly sent two war ships to the Mediterranean Sea, which aggravated Israel. In the background also are ongoing worries regarding the European Union's sovereign debt situation. Traders will be watching for any pronouncements on sovereign debt, trade or world currency values out of a Group of 20 meeting in Paris this weekend.

The U.S. dollar index is trading firmer Friday morning, on some modest short covering following selling pressure this week. The weakening technical posture of the dollar index this week is encouraging to the gold market bulls.

Recent inflation data from major countries, including the U.S., recently has raised the specter of inflationary price pressures becoming problematic. That is also an underlying bullish factor for the precious metals.

Reports recently have stated that Asian physical demand for gold and silver remains strong, which is underpinning precious metals market prices. Reports said Chinese demand for gold in 2011 will be remain very strong.

There are no major U.S. economic reports due for release Friday.

The London A.M. gold fixing was $1,385.50 versus the previous P.M. fixing of $1,377.00.

Technically, the gold market bulls have gained upside near-term technical momentum this week. Prices are in a three-week-old uptrend on the daily bar chart. Gold bulls have the overall near-term and longer-term technical advantage.

Gold bulls' next near-term upside technical breakout objective is to produce a close above solid technical resistance at $1,394.70. Bears' next near-term downside price breakout objective is closing prices below solid technical support at this week's low of $1,354.40. First resistance is seen at the overnight high of $1,388.90 and then at $1,394.70. Support is seen at $1,380.00 and then at Thursday's low of $1,374.60.

March Comex silver futures last traded up 30.0 cents at $31.87 an ounce Friday morning. Prices hit a fresh contract and 30-year high overnight. Silver bulls have the solid overall near-term and longer-term technical advantage, and have gained more power this week. Prices are in a steep three-week-old uptrend on the daily chart.

The next downside price breakout objective for the silver bears is closing prices below major technical support at $30.00. Bulls' next upside price objective is producing a close above solid technical resistance at $35.00 an ounce. First support is seen at the overnight low of $31.61 and then at $31.275. Next resistance is seen at $32.00 and then at $32.50.

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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