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A.M. Kitco Metals Roundup: Gold Trades Near Steady; Firmer U.S. Dollar Limits Buying Interest

Monday July 15, 2013 8:15 AM

(Kitco News) - Gold prices are trading near steady in early U.S. dealings Monday. Prices have backed down just a bit from the overnight high as the U.S. dollar index has moved to its daily high as U.S. trading gets under way. August gold was last up $0.20 at $1,277.80 an ounce. Spot gold was last quoted down $6.10 at $1,279.40. September Comex silver last traded down $0.947 at $19.75 an ounce.

The highly anticipated China second-quarter gross domestic product report, released Monday, showed an as-expected annual growth rate of 7.5%. China GDP has decreased slightly for the second quarter in a row. China industrial output rose by 8.9% on an annual basis in June, which was slightly below expectations. Asian stock markets posted modest gains on the China data, while the precious metals were also slightly supported by the data.

European stock markets were firmer Monday amid a lack of major fresh European Union economic data released. Traders and investors in Europe paid little attention to last Friday's Fitch downgrade of France's credit rating.

The world market place is starting to look ahead to Wednesday's appearance by Federal Reserve Chairman Ben Bernanke before the U.S. House of Representatives, where he will report on U.S. monetary policy and the economy. Traders hope the Fed chief will offer fresh clues on when the Fed will start to back off on its monthly bond-buying program (quantitative easing). Many are still thinking the Fed will do such later this year and as soon as September.

The U.S. dollar index is solidly higher Monday, on a corrective bounce and short covering from the recent strong selling pressure. Nymex crude oil prices are weaker early Monday but are hovering near a 14-month high. These two key "outside markets" are in a daily bearish posture for the precious metals Monday morning.

U.S. economic data due for release Monday includes retail sales, the Empire State manufacturing survey, and manufacturing and trade inventories.

The London A.M. gold fix is $1,281.25 versus the previous London P.M. fixing of $1,279.75.

Technically, the gold market bears remain in overall near-term technical control. However, the bulls have gained some upside near-term technical momentum recently. The bulls still have much work to do to suggest a near-term price uptrend can be sustained. The gold bulls' next upside near-term price objective is to produce a close above technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week's low of $1,214.40. First resistance is seen at the overnight high of $1,293.60 and then at last week's high of $1,297.20. First support is seen at Friday's low of $1,266.40 and then at $1,250.00.

Silver bears have the overall near-term technical advantage but bulls have gained a bit of upside momentum recently. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week's low of $19.67. First resistance is seen at $20.00 and then at last week's high of $20.25. Next support is seen at $19.43 and then at $19.00.

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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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