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P.M. Kitco Roundup: Gold Posts Moderate Gains on Short Covering, Weaker U.S. Dollar

Monday September 16, 2013 2:16 PM

(Kitco News) - Comex gold futures prices ended the U.S. day session moderately higher Monday. The market saw some short covering after prices hit a four-week low last Friday. A weaker U.S. dollar index was also a supportive outside market factor for gold and silver Monday. December Comex gold was last up $7.50 at $1,316.10 an ounce. Spot gold was last quoted down $11.80 at $1316.50. December Comex silver last traded up $0.26 at $21.98 an ounce.

Many markets posted relief rallies Monday on the surprise weekend news that former U.S. Treasury secretary Larry Summers withdrew his name for consideration for chairman of the U.S. Federal Reserve, due to the likely acrimony his nomination would have brought. Many reckoned Summers was President Obama's first choice for the Fed chief. Many markets were cheered on the news on ideas Summers would have been a bit more hawkish on U.S. monetary policy than would current Fed vice chair Janet Yellen, who is now widely believed to be next in line to lead the Federal Reserve.

Gold and silver markets also popped up on the Summers news, but that rallies began to diminish as trading moved from Asia, to Europe and then to the U.S.

The other factor that put more risk appetite into the market place Monday is the weekend agreement by the U.S. and Russia on a plan for the international community to take over Syria's chemical weapons stockpiles. The risk of a U.S. military strike against Syria is presently very low, whereas two weeks ago it seemed imminent the U.S. would attack the Syrian regime.

Traders and investors are looking forward to this week's meeting of the U.S. Federal Reserve's Open Market Committee (FOMC). The meeting begins on Tuesday and ends at midday Wednesday. Fed Chairman Ben Bernanke will also hold a press conference Wednesday afternoon. A majority of the market place believes the U.S. central bank at this week's meeting will announce it will begin to scale back, or "taper" its monthly bond-buying program. Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program. The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases. For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of this week's FOMC meeting.

The London P.M. gold fix is $1,324.00 versus the previous P.M. fixing of $1,318.50.

Technically, December gold futures prices closed near mid-range Monday. The gold market bears still have the overall near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. The gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at $1,325.00 and then at Monday's high of $1,336.00. First support is seen at Monday's low of $1,307.20 and then at last week's low of $1,304.60. Wyckoff's Market Rating: 4.0

December silver futures prices closed near mid-range on short covering. Silver bears have the overall near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at last week's high of $24.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.65. First resistance is seen at Monday's high of $22.49 and then at $22.785. Next support is seen at Monday's low of $21.685 and then at last week's low of $21.42. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed up 210 points at 322.45 cents Monday. Prices closed nearer the session low. Short covering was featured. Copper bears have the near-term technical advantage. A three-week-old downtrend is in place on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week's high of 329.90 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 315.00 cents. First resistance is seen at 325.00 cents and then at Monday's high of 328.15 cents. First support is seen at last week's low of 319.05 cents and then at 317.50 cents. Wyckoff's Market Rating: 4.0.

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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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