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A.M. Kitco Metals Roundup: Comex Gold Prices Trade Near Steady; Bulls Still Strong

(Kitco News) - Comex gold futures prices are trading near unchanged price levels Tuesday morning, as the market pauses following Monday's record-setting gains. Middle East uncertainty and European Union sovereign debt concerns are supportive fundamental factors for the precious metals. Meantime, the technical postures for gold and silver remain fully bullish. Comex April gold last traded unchanged at $1,434.50 an ounce. Spot gold last traded up $2.70 at $1,434.25.

Crude oil prices are trading weaker Tuesday morning, but are still above $104.00 a barrel, as there were no fresh, major developments in the Middle East overnight. Crude oil prices Monday hit another fresh 2.5-year high near $107.00 a barrel. The stronger crude oil prices are bullish for the precious metals due to the inflationary implications and the related geopolitical uncertainty that invites safe-haven demand. Precious metals traders and other traders will continue to look to the crude oil market as a gauge of tension in the Middle East.

Moody's ratings agency Monday downgraded Greece's sovereign debt rating. While this move was not a surprise development, it reminded the market place of the serious problems the European Union is facing with its smaller countries' sovereign debt. Gold and silver bulls realize these problems cannot be quickly solved and will continue to work against the Euro currency, with the possibility of the problem spreading to a worldwide debt contagion. This will limit selling interest in precious metals for at least the near term.

The U.S. dollar index is trading firmer Tuesday on short covering after hitting a five-month low Monday. Dollar index bears still have the technical advantage, which continues to be bullish for the precious metals markets.

U.S. economic data due for release Tuesday includes the NFIB small business index, the Goldman Sachs weekly chain store sales index, the Johnson Redbook weekly retail report and the IBD/TIPP economic optimism index.

The London A.M. gold fixing was $1,435.00 versus the previous P.M. fixing of $1,437.50.

Technically, the gold market bulls still have the strong overall technical advantage as prices hit a fresh all-time high of $1,445.70 Monday. Gold prices are in a steep six-week-old uptrend on the daily bar chart. Gold bulls' next near-term upside technical objective is to produce a close above psychological resistance at $1,500.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,410.00. First resistance is seen at the overnight high of $1,437.20 and then at $1,445.70. Support is seen at the overnight low of $1,426.10 and then at $1,420.00.

May Comex silver futures last traded up 41.0 cents at $36.275 an ounce Tuesday morning. Prices hit a fresh 31-year high of $36.745 on Monday. Silver bulls have the strong 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 $35.00. Bulls' next upside price objective is producing a close above solid technical resistance at $37.50 an ounce. First support is seen at $36.00 and then at the overnight low of $35.51. Next resistance is seen at the overnight high of $36.55 and then at $37.00.

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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