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http://www.kitco.com/reports/KitcoNews20111207JW_pm.html

(Kitco News) - Comex February gold futures prices ended the U.S. day session sharply lower and near the daily low Thursday. Fresh, downbeat news out of the European Union was deemed bearish for the precious metals and many other markets. The U.S. stock indexes also sank on the EU news, while the U.S. dollar index rallied. Once again, the market place is held hostage by developments coming out of the European Union. February gold last traded down $31.00 at $1,713.80 an ounce. Spot gold last traded down $33.00 an ounce at $1,710.50. March Comex silver last traded down $0.962 at $31.665 an ounce.

The European Central Bank at its meeting Thursday did reduce its key interest rate, but not by as much as many in the market place had expected. Also, the ECB bank chief on Thursday hinted there will be no dramatic moves by the EU or ECB, in the near term, to solve the EU sovereign debt and financial crisis. This threw cold water on hopes there would be some big announcement on fixing the EU debt crisis coming out of the EU summit meeting late this week. Some EU leaders had pledged will take serious steps this week to get the EU debt crisis under control. The market place has heard such rhetoric many times before. Talk is also in the market place that Germany is dragging its feet on any firm decisions coming out of the latest meetings.

The U.S. dollar index was trading slightly lower early Thursday morning, but then immediately rallied on the fresh, downbeat news coming out of the European Union. The dollar index bulls still have the overall near-term technical advantage. Crude oil prices were trading slightly higher early Thursday morning, but then sold off quickly on the EU news and as the U.S. stock market slumped.

The London P.M. gold fixing was $1,715.00 versus the previous P.M. fixing of $1,735.50.

Technically, February gold futures prices closed nearer the session low Thursday and scored a bearish "outside day" down on the daily bar chart. Bulls faded Thursday. Bulls do still have the slight overall near-term technical advantage. A 10-week-old uptrend is still in place on the daily bar chart, but now just barely. Bulls' next upside technical breakout objective is to produce a close above solid technical resistance at last week's high of $1,767.10. Bears' next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at $1,725.00 and then at $1,750.00. First support is seen at this week's low of $1,705.70 and then at $1,700.00. Wyckoff's Market Rating: 5.5.

March silver futures prices closed nearer the session low Thursday and also scored a bearish "outside day" down on the daily bar chart. Bulls' next upside price breakout objective is closing prices above solid technical resistance at $34.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of $30.74. First resistance is seen at $32.00 and then at $32.50. Next support is seen at Thursday's low of $31.465 and then at $31.00. Wyckoff's Market Rating: 5.0.

March N.Y. copper closed down 570 points 349.90 cents Thursday. Prices closed nearer the session low. The key "outside markets" were in a bearish posture for copper Thursday, as the U.S. dollar index was higher while crude oil and the U.S. stock indexes were lower. Bulls and bears are on a level near-term technical playing field, but the bulls did fade Thursday. A minor bullish pennant pattern on the daily bar chart was negated today. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the December high of 367.40 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of 321.85 cents. First resistance is seen at 352.50 cents and then at 355.00 cents. First support is seen at Thursday's low of 347.90 cents and then at 345.00 cents. Wyckoff's Market Rating: 5.0.

Follow me on Twitter! If you want daily, or nightly, up-to-the-second market analysis on gold and silver price action, then follow me on Twitter. It's free, too. My account is @jimwyckoff .

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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