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A.M. Kitco Metals Roundup: Gold Up, At 4-Week High, on Technical Momentum And Weaker U.S. Dollar

Thursday October 24, 2013 8:16 AM

(Kitco News) - Gold prices are moderately higher and have hit a fresh four-week high in early U.S. trading Thursday. The market is supported by near-term charts that are turning more bullish and by the slumping U.S. dollar index. December Comex gold was last up $9.90 at $1,343.90 an ounce. Spot gold was last quoted up $9.50 at $1343.75. December Comex silver last traded up $0.168 at $22.785 an ounce.

The gold and silver markets could react to U.S. economic data due for release Thursday, which includes the weekly jobless claims report, the trade deficit report, the flash manufacturing PMI, and the Kansas City Fed business survey.

In overnight news, the preliminary HSBC China manufacturing PMI came in better than expected and hit a seven-month high of 50.9 in October versus the final PMI reading of 50.2 in September. A reading above 50.0 suggests economic expansion. While the PMI report was deemed upbeat by Asian market watchers, the overhanging worry of rising short-term interest rates in China muted bullishness. An overheating housing market in China and the rising short-term interest rates are sparking fears the Chinese central bank could tighten monetary policy, which in turn could reduce demand for raw commodities coming from China.

In the European Union, its manufacturing and services PMI report came in weaker than expected, at 51.5 in October versus 52.2 in September. The report caused the Euro currency to backed down from its 23-month high scored against the U.S. dollar earlier in the session.

The U.S. dollar index is weaker early Thursday and sunk to another 10.5-month low overnight. Meantime, Nymex crude oil futures near steady on tepid short covering after prices hit a seven-week low on Wednesday. These two key "outside market" forces are in a neutral to bullish daily posture for the precious metals markets.

Reports from Asia say consumer demand for physical gold is on the rise, what with holiday seasons approaching.

The London A.M. gold fix is $1,336.25 versus the previous P.M. fixing of $1,331.25.

Technically, December gold futures bulls and bears are on an overall level near-term technical playing field at present, but the bulls have the momentum on their side. The gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,353.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at $1,350.00 and then at $1,353.80. First support is seen at the overnight low of $1,330.20 and then at $1,320.00.

December silver futures prices hit a five-week high overnight, and bulls and bears are back on a level near-term technical playing field--but the bulls have momentum. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $23.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $21.00. First resistance is seen at the overnight high of $22.87 and then at $23.00. Next support is seen at the overnight low of $22.51 and then at $22.25.

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Read the latest news in gold and precious metals markets at Kitco News.

By Jim Wyckoff, contributing to 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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