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A.M. Kitco Metals Roundup: Comex Gold Steady-Weak, Silver Lower as Risk Aversion Back in the Market Place

(Kitco News) - Comex gold futures are trading steady to weaker, while silver is under solid selling pressure Thursday morning. A spate of weak U.S. economic data recently has thrown a scare into the market place, and that is prompting some fresh safe-haven investment demand for gold. However, some profit-taking pressure is occurring in both metals following recent gains. August gold last traded down $1.60 an ounce at $1,541.60. Spot gold last traded up $1.10 an ounce at $1,540.50. July Comex silver last traded down $0.834 at $36.86 an ounce.

Wednesday's much-weaker-than-expected U.S. monthly ADP jobs report spooked the market place and came amid other U.S. economic data that has also been weaker than expected. The risk aversion that has re-entered the market place recently has been bullish for gold, but bearish for other commodity markets, including silver. Now, Friday's monthly U.S. jobs report becomes even more important for the markets, on a near-term basis. Forecasters have been ratcheting down their expectations for the key non-farm payrolls growth number in the jobs report.

The European Union's smaller countries' sovereign debt crisis that continues to play out is also a market factor, but has taken a back seat to the weak U.S. data this week. There are ideas the EU and IMF are closer to working out a debt relief deal with Greece, and that has somewhat supported the Euro currency this week. However, the Fitch ratings agency late Wednesday issued another downgrade on the financial outlook for Greece.

The U.S. dollar index is trading lower again Thursday morning and hit another fresh three-week low overnight. The U.S. dollar index bulls have faded and bears have downside near-term technical momentum. The dollar index is in a posture where it could head back down and retest the recent 2.5-year low in the near term. The greenback has not been a beneficiary of the recent safe-haven moves by investors.

Crude oil prices are trading near steady early Thursday. Crude oil bulls still have the overall near-term technical advantage, but trading has again turned choppy. The recent weak U.S. economic data is bearish for crude. And crude oil has been and will continue to be a leader in the raw commodity market sector. This is one reason why silver has failed to attract the buying interest that gold has seen this week.

U.S. economic data due for release Thursday includes the weekly jobless claims report, productivity and costs data, manufacturers' shipments and orders and the weekly DOE energy stocks report.

The London A.M. gold fixing is $1,540.75 versus the previous P.M. fixing of $1,533.75.

Technically, August Comex gold futures bulls have the solid overall near-term and longer-term technical advantage. Prices Wednesday hit a four-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 the all-time high of $1,577.70. Bears' next near-term downside price objective is closing prices below solid technical support at $1,515.60. First resistance is seen at Wednesday's high of $1,551.60 and then at $1,558.00. First support is seen at the overnight low of $1,538.30 and then at $1,530.00.

July Comex silver futures bulls still have the overall near-term and longer-term technical advantage but have faded a bit this week and need to show fresh power soon. 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 $37.00 and then at $37.50. Next support is seen at Wednesday's low of $36.355 and then at $36.00.

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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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