A.M. Kitco Metals Roundup: Comex Gold, Silver Lower Early on Profit Taking, Corrective Pullback
(Kitco News) - Comex gold and silver futures are trading lower in early trading Wednesday, on profit taking pressure and a corrective pullback from recent gains. A firmer U.S. dollar index and weaker crude oil prices Wednesday are bearish weights on the precious metals. The general market place is reacting to a downbeat speech on the U.S. economy by Federal Reserve Chairman Ben Bernanke Tuesday afternoon. August gold last traded down $7.70 an ounce at $1,536.30. Spot gold last traded down $9.40 an ounce at $1,536.00. July Comex silver last traded down $0.701 at $36.345 an ounce.
The U.S. stock indexes and most commodity markets are under some selling pressure Wednesday morning in the wake of Fed Chairman Bernanke's speech to an IMF conference Tuesday afternoon. Bernanke said the Federal Reserve is disappointed at the slow and uneven growth pace of the U.S. economy. That assessment by the nation's head banker has pressured many markets, including the precious metals. However, gold, especially had seen a solid run higher and was due for a corrective pullback in prices.
The U.S. dollar index is trading firmer Wednesday on short covering in a bear market. The index hit a four-week low Tuesday. The greenback is likely to see more selling pressure in the near term amid better economic data coming out of the European Union at the same time weak data comes out of the U.S. There are now notions the European Central Bank will raise interest rates soon, which would be another bearish blow to the U.S. dollar index and boost for the Euro currency.
Crude oil prices are trading weaker Wednesday, amid market reports OPEC will pump more crude oil amid falling world demand due to higher prices. Crude oil trading has turned choppy. Crude oil has been and will continue to be a leader in the raw commodity market sector.
U.S. economic data due for release Wednesday includes the weekly mortgage applications survey, the weekly DOE energy report and the Federal Reserve's beige book.
The London A.M. gold fixing is $1,535.50 versus the previous P.M. fixing of $1,544.00.
Technically, August Comex gold futures bulls still have the solid overall near-term and longer-term technical advantage. A four-month-old uptrend is in place on the daily bar chart and a 10-year-old uptrend is in place on the longer-term monthly chart. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at the all-time high of $1,577.70. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,520.40. First resistance is seen at the overnight high of $1,547.40 and then at this week's high of $1,555.00. First support is seen at the overnight low of $1,532.80 and then at $1,520.40.
July Comex silver futures bulls have the overall near-term and longer-term technical advantage. The next downside price breakout objective for the bears is closing prices below solid technical support at last week's low of $35.065. Bulls' next upside price objective is producing a close above solid technical resistance at $38.845 an ounce. First resistance is seen at $37.00 and then at the overnight high of $37.25. Next support is seen at $36.00 and then at $35.50.
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By Jim Wyckoff of Kitco News; firstname.lastname@example.org
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