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A.M. Kitco Metals Roundup: Comex Gold Sharply Lower as Investor Risk Appetite Sees Uptick Wednesday

(Kitco News) - Comex December gold futures are trading sharply lower in early U.S. trading Wednesday, on profit-taking pressure and weak long liquidation after prices Tuesday scored an all-time record high of $1,923.70 an ounce. It's a "risk on" day in the market place Wednesday as the U.S. and European stock indexes are trading higher and U.S. Treasury prices and the U.S. dollar index are trading lower. December gold last traded down $32.20 at $1,841.20 an ounce. Spot gold last traded down $35.00 an ounce at $1,839.00. December Comex silver last traded down $0.688 at $41.18 an ounce. European and U.S. stock indexes were boosted Wednesday on news that the German courts recognized the legality of Germany's participation in the Greek debt bailout. This news built upon improving investor risk appetite after the U.S. stock indexes on Tuesday closed well up from their daily lows. However, the European Union debt crisis continues to fester with no easy fixes. There have been ongoing negotiations among EU leaders, with the underlying theme that there is still not uniform agreement on specific near-term actions to be taken. Italy is also the focus this week, with Italian bond yields rising amid talk of worker strikes about to occur there. The EU debt crisis continues to be a major bullish factor for the gold market. There were reports overnight of heavy selling of gold in the Asian markets, with some speculating a government may have been selling large quantities of gold. The U.S. and European stock markets will continue to be the key gauge of worldwide investor risk appetite in the market place. On days of better investor risk appetite (higher stocks) buying interest in gold will likely be limited. On days of shrinking investor risk appetite (lower stocks) gold will likely see more buying interest. The U.S. dollar index is trading weaker Tuesday, on a corrective pullback from recent gains. While the greenback bears still have the overall near-term technical advantage, bulls have gained some fresh upside near-term technical momentum to begin to suggest a near-term market low is in place. However, fundamentally, notions of a fresh U.S. monetary stimulus package from the Federal Reserve in the coming weeks or few months will likely limit the upside for the dollar index. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs chain store sales index, and the weekly Johnson Redbook retail sales report, The London A.M. gold fixing was $1,844.00 versus the previous P.M. fixing of $1,895.00. Technically, December gold futures bulls still have the solid near-term and longer-term technical advantage. No near-term chart damage has occurred with this corrective pullback in an uptrend. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at Tuesday's record high of $1,923.70. Above that lies major psychological resistance at $2,000.00. Bears' next near-term downside price objective is closing prices below psychological support at $1,800.00. First resistance is seen at $1,860.00 and then at the overnight high of $1,883.20. First support is seen at the overnight low of $1,818.20 and then at $1,800.00. December silver futures bulls still have the overall near-term technical advantage even though prices are under some profit-taking pressure this week. Prices are still in a choppy, two-month-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 psychological support at $40.00. First resistance is seen at $42.00 and then at the overnight high of $42.275. Next support is seen at $41.00 and then at the overnight low of $40.52. Follow me on Twitter to immediately get the very latest market developments. If you are not on board, then you are not getting key analysis and perspective as fast or as often as you could! Follow me on Twitter to get my very timely intra-day and after-hours briefs on precious metals price action. The precious markets will remain very active. If you want market analysis fast, and in after-hours trading, then follow my up-to-the-second precious metals market perspective on Twitter. It's free, too. My account is @jimwyckoff . By Jim Wyckoff, contributing to Kitco News; jim@jimwyckoff.com By Jim Wyckoff contributing to Kitco News; jim@jimwyckoff.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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