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P.M. Kitco Metals Roundup: Gold Ends Sharply Higher As Bulls Gain Some Technical Momentum

Thursday July 11, 2013 1:44 PM

(Kitco News) - Gold prices ended the U.S. day session sharply higher Thursday and hit a two-week high near $1,300.00. The precious metals and the rest of the market place got some bullish news from the latest "Fed speak" that also pushed the U.S. dollar index sharply lower. The gold and silver markets bulls started to regain some upside near-term technical momentum Thursday, but still have more work to do in the near term to suggest any price uptrends can be sustained. August gold was last up $32.40 at $1,279.70 an ounce. Spot gold was last quoted up $18.20 at $1,281.50. September Comex silver last traded up $0.80 at $19.965 an ounce.

Federal Reserve Chairman Ben Bernanke in a speech Wednesday after most U.S. markets were closed said the U.S. central bank still needs to be very accommodative in its monetary policy for economic growth to continue, and that the Fed will not raise interest rates "for some time" to come. Bernanke's remarks, along with the FOMC minutes, released Wednesday afternoon, showing a deep split between members on when to start to wind down the Fed's monthly bond-buying program (quantitative easing) has at least temporarily changed the market place's notions of when QE will begin to be scaled back. It appears the market place now believes the Fed will start to "taper" its monthly bond buying program later rather than sooner.

The past few months have seen Bernanke's remarks and other Fed data roil the market place, and Wednesday's Fed events did not disappoint. The U.S. dollar index dropped sharply on the Fed news, while gold and U.S. Treasury bond and notes futures prices shot higher. Other commodity markets also saw buying support on the Fed news. The easy money policies of the Federal Reserve and other major central banks of the world the past few years have been a major bullish factor for the bond and raw commodity markets.

The London P.M. gold fix is $1,285.00 versus the previous London P.M. fixing of $1,256.00.

Technically, August gold futures prices closed near mid-range Thursday and hit a fresh two-week high. A weekly high close on Friday would be a solid clue that the gold market has put in a near-term bottom. But at present the gold bears still have the overall near-term technical advantage. The gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at this week's low of $1,214.40. First resistance is seen at Thursday's high of $1,297.20 and then at $1,300.00. First support is seen at Thursday's low of $1,262.10 and then at $1,250.00. Wyckoff's Market Rating: 3.0

September silver futures prices closed nearer the session high and hit a fresh six-week high Thursday. Bulls have regained upside momentum and a bullish weekly high close on Friday would begin to suggest that a near-term market bottom is in place. But right now the silver bears still have the overall near-term chart advantage. 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 this week's low of $18.67. First resistance is seen at Thursday's high of $20.25 and then at $20.50. Next support is seen at Thursday's low of $19.43 and then at $19.00. Wyckoff's Market Rating: 3.0.

September N.Y. copper closed up 875 points at 317.85 cents Thursday. Prices closed nearer the session high today and hit a fresh three-week high on short covering. The sharply lower U.S. dollar index also boosted copper prices Thursday. Copper bears still have the overall near-term technical advantage. A bullish weekly high close on Friday would begin to suggest that a market low is in place for copper. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at this week's low of 302.50 cents. First resistance is seen at Thursday's high of 320.10 cents and then at 322.00 cents. First support is seen at 315.00 cents and then at 311.60 cents. Wyckoff's Market Rating: 3.0.

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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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