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P.M. Kitco Metals Roundup: Comex Gold, Silver End Near Unchanged on Conflicting Market Forces

(Kitco News) - Comex gold and silver futures prices closed the day trading session near unchanged levels Wednesday. Gains in precious metals were limited by a strong rally in the U.S. dollar index and sharply lower crude oil prices. However, selling pressure was mitigated by safe-haven investment demand due to an escalation in the European Union's debt crisis with Greece. Look for a more active trading day in many markets on Thursday, due to the EU situation and the big moves Wednesday in the U.S. dollar index and crude oil. August gold last traded down $0.40 an ounce at $1,524.00. Spot gold last traded down $1.20 an ounce at $1,523.50. July Comex silver last traded down $0.041 at $35.37 an ounce.

The U.S. dollar index traded strongly higher Wednesday and hit a fresh three-week high on flight-to-safety buying and as the Euro was hit hard by the lingering wrangling going on among European Union and IMF officials, regarding what to do about Greece's very serious debt problems. There was rioting in the streets of Athens Wednesday, amid rumors Greece's government was on the verge of collapsing. Bond yield spreads in Europe are at record levels this week, which underscores the serious nature of the Greek debt issue. Remember that Greece is just one EU country among several that are also on very shaky ground with their finances. The precious metals were supported by safe-haven buying amid the EU debt crisis that has been playing out for a year and a half.

Crude oil prices traded sharply lower Wednesday and hit a fresh four-month low of $94.03 a barrel, on the EU debt crisis and in the wake of recent weak economic data from the U.S. and China. Serious near-term technical damage was inflicted in the crude oil market Wednesday, to suggest still more downside price pressure for oil in the near term. That would be a bearish factor for the precious metals markets.

A heavy slate of U.S. economic data was released Wednesday and it was a mixed bag for the precious metals. A hotter-than-expected consumer price index reading did support the precious metals, due to the inflationary implications.

The London P.M. gold fixing $1,529.75 versus the previous P.M. fixing of $1,516.00.

Technically, August Comex gold futures prices closed near mid-range Wednesday. Gold bulls have the overall near-term and longer-term technical advantage. Prices are in a 4.5-month-old uptrend on the daily bar chart. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at the June high of $1,555.00. Bears' next near-term downside price objective is closing prices below psychological support at $1,500.00. First resistance is seen at Wednesday's high of $1,535.70 and then at $1,540.00. First support is seen at $1,520.00 and then at Wednesday's low of $1,514.50. Wyckoff's Market Rating: 6.5.

July silver futures prices closed near mid-range Wednesday. Silver bulls have the slight overall near-term technical advantage, but still need to show more power soon to keep that advantage. 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 last week's high of $37.86 an ounce. First resistance is seen at $36.00 and then at $36.50. Next support is seen at $35.00 and then at Wednesday's low of $34.81. Wyckoff's Market Rating: 5.5.

July N.Y. copper closed down 400 points at 411.00 cents Wednesday. Prices closed near the session low. The key "outside markets" were bearish for copper Wednesday, as the U.S. dollar index was sharply higher and crude oil prices were sharply lower. Copper bulls and bears are back on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 426.70 cents. The next downside price breakout objective for the bears is closing prices below major psychological support at 400.00 cents. First resistance is seen at 415.00 cents and then at today's high of 418.00 cents. First support is seen at 410.00 cents and then at 408.00 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, 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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