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A.M. Kitco Metals Roundup: Comex Gold, Silver Lower as "Outside Markets" Bearish

(Kitco News) - Comex gold and silver futures prices are trading modestly lower Wednesday morning, pressured by a stronger U.S. dollar index and weaker crude oil prices . However, selling pressure in the precious metals is being limited by the European Union's sovereign debt crisis that will just not go away. August gold last traded down $5.70 an ounce at $1,518.70. Spot gold last traded down $6.40 an ounce at $1,518.25. July Comex silver last traded down $0.401 at $35.01 an ounce.

The U.S. dollar index is trading solidly higher Wednesday morning, on short covering and on the lingering wrangling going on among European Union and IMF officials, regarding what to do about Greece's very serious debt problems. Bond yield spreads in Europe are at record levels this week, which underscores the serious nature of the Greek debt issue. The Euro currency is under selling pressure due to the debt crisis. And Greece is just one EU country among several that are on shaky ground with their finances. The precious metals are being supported by safe-haven buying amid the EU debt crisis that has been playing out for a year and a half.

Crude oil prices are trading modestly lower early Wednesday. The market on Tuesday shrugged off potentially bearish news that China has again tightened its monetary policy to reduce demand for commodities. Crude oil prices are in a choppy and sideways trading range at present.

A heavy slate of U.S. economic data due for release Wednesday will likely provide some price direction for gold and silver markets. The U.S. data includes the weekly MBA mortgage applications survey, the consumer price index, the Empire State manufacturing survey, real earnings, Treasury international capital data, industrial production and capacity utilization, the NAHB housing market index and the weekly DOE energy stocks report.

The London A.M. gold fixing was $1,517.75 versus the previous P.M. fixing of $1,516.00.

Technically, August Comex gold futures bulls still have the overall near-term and longer-term technical advantage. A four-month-old uptrend is still in place on the daily bar chart and a 10-year-old uptrend is in place on the longer-term monthly chart. Bulls need to show some more power soon to regain some near-term upside technical momentum that they enjoyed in early June. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at the June high of $1,555.00. 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 $1,528.80 and then at this week's high of $1,533.90. First support is seen at this week's low of $1,511.40 and then at $1,500.00.

July Comex silver futures bulls still have the overall near-term and longer-term technical advantage, but also need to show some more power soon to regain fresh upside near-term technical momentum. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $32.30. Bulls' next upside price objective is producing a close above solid technical resistance at last week's high of $37.86 an ounce. First resistance is seen at the overnight high of $35.70 and then at $36.00. Next support is seen at this week's low of $34.40 and then at $34.00.

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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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