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P.M. Kitco Metals Roundup: Comex Gold, Silver End Solidly Higher as Crude Oil Scores Sharp Gains, U.S. Dollar Index Steady-Weak

(Kitco News) - Comex gold and silver futures prices scored solid gains Wednesday as the precious metals took the lead from a sharply higher crude oil market. June gold last traded up $10.00 an ounce at $1,497.50. Spot gold last traded up $6.00 an ounce at $1,493.50. July Comex silver last traded up $1.749 at $35.24 an ounce.

Crude oil prices rallied sharply Wednesday, to lead most of the raw commodity sector, including the precious metals, higher. Nearby Nymex crude oil futures pushed back above the psychological resistance barrier of $100.00 a barrel and were sporting gains of nearly $4.00 on the day. A bullish weekly U.S. energy stocks report, severe flooding in the southern U.S. that has curtailed refinery production, as well as a big prairie fire in Canada oil-producing regions all combined to push crude oil prices sharply higher Wednesday. If crude prices can hold above $100.00 a barrel, then the commodity sector would see that as a bullish underlying factor due to inflation concerns.

The U.S. dollar index traded steady to weaker Wednesday, which was mildly supportive to the precious metals. The dollar index bulls had gained some upside technical momentum recently, to begin to suggest that at least a near-term market low is in place. However, the dollar index bulls need to show fresh power very soon to keep their newfound momentum. Any sustained recovery in the U.S. dollar index would be a bearish development for the precious metals markets.

U.S. interest rates have been creeping back down recently, as evidenced by rising U.S. Treasury bond and note prices. The U.S. stock indexes have also backed off from their recent highs. This hints that the U.S. economy's growth rate is tepid at best, and that there are still some major "issues" in the world--both geopolitical and economic/financial--that investors have not forgotten about. Precious metals traders should keep a close eye on the U.S. debt market. At present, the U.S. debt market and the falling bond and note yields (rising prices) are suggesting risk aversion is returning to the market place. This is a bullish underlying factor for the precious metals markets.

News reports overnight said physical demand for gold and silver in Asia is on the rise following the recent downside correction in gold prices .

The London P.M. gold fixing $1,496.50 versus the previous P.M. fixing of $1,478.50.

Technically, June Comex gold futures prices closed nearer the session high Wednesday. Gold bulls have the overall near-term and longer-term technical advantage. However, prices have been trending lower for nearly three weeks, from the all-time high of $1,577.40. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at last week's high of $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 $1,500.00 and then at this week's high of $1,504.30. First support is seen at Wednesday's low of $1,484.60 and then at this week's low of $1,471.10. Wyckoff's Market Rating: 6.5.

July Comex silver futures closed nearer the session high Wednesday. While near-term chart damage has occurred in silver recently, good follow-through buying on Thursday would provide the bulls with some fresh upside near-term technical momentum to at least suggest the market has stabilized. 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 Wednesday's high of $35.55 and then at $36.00. Next support is seen at $35.00 and then at $34.50. Wyckoff's Market Rating: 5.0.

July N.Y. copper closed up 1,160 points at 411.45 cents Wednesday. Prices closed near the session high and hit a fresh two-week high. Copper was supported by sharply higher crude oil prices and a steady-weak U.S. dollar index. Copper bulls and bears are now 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 420.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at this week's low of 394.65 cents. First resistance is seen at today's high of 411.75 cents and then at 415.00 cents. First support is seen at 410.00 cents and then at 407.50 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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