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A.M. Kitco Metals Roundup: Comex Gold Weaker in Consolidative Trade, But Bulls Still in Technical Command

(Kitco News) - Comex December gold futures prices are trading weaker in early U.S. trading Wednesday. Stable U.S. and European stock markets have pulled away some investment demand for the precious metals. However, losses are being limited by bargain hunters willing to step in and buy the dips and by a still-bullish overall technical posture for gold. Price action so far Wednesday appears to be just consolidative, from a chart perspective. December gold last traded down $9.60 at $1,820.50 an ounce. Spot gold last traded down $17.50 an ounce at $1,818.00. December Comex silver last traded down $0.218 at $40.975 an ounce.

There were some new overnight developments on the European Union sovereign debt crisis front. Moody's downgraded two major French banks credit rating. There were more indications from Chinese officials that China may indeed be interested in purchasing some European debt in some form. And, traders are awaiting a reported conference call between the leaders of Greece, Germany and France Wednesday. The stable U.S. and European stock markets are reflecting the attitude that the EU debt crisis, at present, is not deteriorating, and may be improving just a bit what with the intense negotiations taking place among EU officials. But still, there has been no major breakthrough regarding effectively dealing with Greece's debt. The EU debt crisis remains a major underlying bullish factor for gold.

The U.S. dollar index is trading near steady Wednesday. The greenback bulls still have some upside near-term technical momentum to suggest a price uptrend can be sustained. The EU debt crisis has been supported for the U.S. dollar. The recent stronger U.S. dollar index has been a bearish underlying factor for the precious metals markets.

Crude oil futures prices are also trading near steady Wednesday. Crude oil bulls have gained some fresh upside momentum this week as prices Tuesday hit a fresh five-week high. Crude oil will remain an important "outside market" that will influence the precious metals markets.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index, retail sales, manufacturing and trade data, and the weekly DOE energy stocks report.

The London A.M. gold fixing was $1,829.00 versus the previous P.M. fixing of $1,820.00.

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Technically, December gold futures bulls maintain the solid overall technical advantage, amid higher volatility on a daily basis. Shorter-term and longer-term price uptrends are in place on the charts. Bulls' next upside technical objective is to produce a close above solid technical resistance at the all-time high of $1,923.70. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,793.80. First resistance is seen at the overnight high of $1,848.20 and then at this week's high of 1,865.20. First support is seen at $1,800.00 and then at $1,793.80.

December silver futures bulls still have the overall near-term technical advantage. Prices are still in a choppy, 10-week-old uptrend on the daily bar chart. Bulls' next upside price objective is producing a close above strong technical resistance at the September high of $43.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week's low of $39.75. First resistance is seen at the overnight high of $41.41 and then at this week's high of $41.60. Next support is seen at $40.50 and then at $40.00.

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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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