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P.M. Kitco Metals Roundup: Comex Gold Higher, Silver Weaker amid Crude Oil Sell Off, Stronger U.S. Dollar Index

(Kitco News) - Comex gold futures prices closed higher Monday, while silver saw modest selling pressure. The key "outside markets"--the U.S. dollar and crude oil--were in a bearish posture for the precious metals Monday, as the U.S. dollar index was sharply higher and crude oil prices were sharply lower. However, the gold market saw safe-haven buying interest as investor risk appetite shrunk due to fresh European Union debt concerns. June gold last traded up $6.20 an ounce at $1,515.10. Spot gold last traded up $1.90 an ounce at $1,516.00. July Comex silver last traded down $0.227 at $34.86 an ounce.

The continually simmering European Union sovereign debt crisis has once again been moved to the front burner of the market place. Ratings agencies have once again issued downgrades and warnings regarding the debt and financial condition of the so called "PIG" countries in the EU. This time its Greece that is garnering the most scrutiny in the market place. However, Belgium also entered the mix today with an outlook downgrade from a ratings agency. The EU debt crisis is not going to disappear and is an underlying bullish factor for safe-haven assets like gold.

Crude oil prices traded sharply lower Monday. Trading has turned very choppy in crude. News reports overnight that Chinese economic growth may be sputtering, along with some recent weak U.S. economic data, combined with the EU turmoil, has the market place reckoning demand for liquid energy has waned in recent months and may continue to do so. Crude oil has been and will continue to be the leader in the raw commodity market sector.

The U.S. dollar index traded sharply higher Monday, as the Euro currency dropped below major support at 1.4000 amid the renewed EU debt concerns. The dollar index bulls have quickly regained upside technical momentum as prices Monday hit a fresh seven-week high. A resumption of the near-term price uptrend in the dollar index has been bearish for the precious metals and most other commodity markets. If the dollar index continues to trend higher in the coming weeks, that would suggest many commodity markets, including the precious metals, may have put in at least near-term market tops. However, keep in mind that gold and the dollar index can rally in tandem if the market place perceives keener market uncertainty, such as a further, serious deterioration in the EU debt crisis. Such was the case Monday.

The London P.M. gold fixing $1,510.50 versus the previous P.M. fixing of $1,490.75.

Technically, June Comex gold futures prices closed nearer the session high Monday and hit a fresh two-week high. There was follow-through buying strength following Friday's bullish weekly high close. Gold bulls have the overall near-term and longer-term technical advantage and have just regained some upside near-term technical momentum. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at $1,526.80. Bears' next near-term downside price objective is closing prices below solid technical support at the May low of $1,462.50. First resistance is seen at Monday's high of $1,519.00 and then at $1,526.80. First support is seen at Monday's low of $1,503.70 and then at $1,500.00. Wyckoff's Market Rating: 6.5.

July Comex silver futures closed near mid-range Monday. While some near-term chart damage has occurred in silver recently, the market has at least temporarily stabilized as trading has been choppy and sideways. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $32.30. Bulls' next upside price objective is producing a close above solid technical resistance at $37.00 an ounce. First resistance is seen at last week's high of $35.75 and then at $36.00. Next support is seen at Monday's low of $34.34 and then at $34.00. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed down 1,345 points at 398.70 cents Monday. Prices closed nearer the session low. Copper was pressured by sharply lower crude oil prices and a stronger U.S. dollar index. Copper bears regained the slight near-term technical advantage today. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week's high of 411.05 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of 385.35 cents. First resistance is seen at 400.00 cents and then at 402.50 cents. First support is seen at Monday's low of 395.05 cents and then at 392.50 cents. Wyckoff's Market Rating: 4.5.

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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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