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A.M. Kitco Metals Roundup: Comex Gold Near Steady, Silver Up amid Lower U.S. Dollar Index, Stronger Crude Oil Prices

(Kitco News) - Comex gold is trading near unchanged price levels and silver futures are solidly higher Tuesday morning. Both metals are seeing buying support coming from a lower U.S. dollar index and sharply higher crude oil prices . August gold last traded up $0.10 an ounce at $1,537.40. Spot gold last traded down $3.20 an ounce at $1,536.50. July Comex silver last traded up $0.652 at $38.515 an ounce.

The U.S. dollar index is trading lower Tuesday morning and hit a fresh three-week low overnight. The Euro currency is getting a boost Tuesday on reports Germany is now more willing to work with Greece on an EU/IMF bailout package for the debt-strapped nation. Look for news reports out of the EU, regarding the bloc's sovereign debt crisis, to be more frequent and possibly market-moving this week as meetings are taking place in Athens this week. The U.S. dollar index bulls have faded badly to end the month as bears have regained downside near-term technical momentum. The dollar index is now in a posture where it could head back down and retest the recent 2.5-year low in the near term. Such would be bullish for the precious metals markets.

Crude oil prices are trading sharply higher early Tuesday, amid the lower U.S. dollar index and reports that a major oil pipeline from Canada into the U.S. has been shut down. The fact that crude oil prices are above $100.00 a barrel is still an underlying bullish factor for the precious metals, due to its inflationary implications. Crude oil has been and will continue to be the leader in the raw commodity market sector.

Gold and silver bulls have had success the past two weeks, as prices Tuesday morning are hovering near three-week highs. Safe-haven buying has surfaced in the precious metals, mainly due to the European Union's smaller countries' sovereign debt crisis that continues to inject investor uncertainty into the market place. Better physical demand from Asia recently has also been bullish for the precious metals.

U.S. economic data due for release Tuesday includes the Chicago Fed Midwest manufacturing index, the ISM New York report on business, the S&P, Case-Shiller home price index, the Chicago ISM survey, the consumer confidence index and the Texas manufacturing outlook survey.

The London A.M. gold fixing is $1,537.00 versus the previous P.M. fixing of $1,533.00.

Technically, August Comex gold futures bulls have the overall near-term and longer-term technical advantage and have gained upside technical momentum recently. Prices overnight hit a fresh three-week high and a four-month-old uptrend on the daily bar chart has been re-established. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at $1,550.00. Bears' next near-term downside price objective is closing prices below major psychological support at $1,500.00. First resistance is seen at the overnight high of $1,541.80 and then at $1,550.00. First support is seen at $1,530.00 and then at $1,520.00.

July Comex silver futures have also seen a good rebound recently and are trading near a three-week high. The bulls have upside near-term technical momentum to suggest a market low is in place. The next downside price breakout objective for the bears is closing prices below solid technical support at $36.00. Bulls' next upside price objective is producing a close above solid technical resistance at $39.47 an ounce. First resistance is seen at last week's high of $38.845 and then at $39.00. Next support is seen at $38.00 and then at the overnight low of $37.76.

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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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