P.M. Kitco Metals
Roundup: Gold Ends Solidly Higher, on Verge of Bullish Upside
Technical Breakout by Kitco News | Tuesday August
21, 2012 2:03 PM
Comex gold futures prices ended the U.S.
day session with good gains and hit a fresh 2.5-month high
Tuesday. It was a “risk-on” day in the market
place Tuesday, as most commodity futures markets saw buying
interest sparked by the key outside markets being in a daily
bullish posture--the U.S. dollar index was solidly lower
and crude oil prices were higher. The gold bulls gained
fresh upside near-term technical momentum Tuesday. Meantime,
the silver market bulls this week have also gained good
technical strength. December gold last traded up $18.60
at $1,641.50 an ounce. Spot gold was last quoted up $18.30
an ounce at $1,640.00. September Comex silver last traded
up $0.842 at $29.435 an ounce.
The precious metals also got some underlying
support from overnight news. European stocks were firmer
Tuesday as a Spanish treasury bill auction was deemed successful.
European investors presently are more confident the European
Central Bank will be more aggressive in dealing with and
aiding the financially troubled EU countries going forward.
However, I look for the EU debt crisis to move back to the
front burner of the market place in September. Such could
spark fresh safe-haven demand for gold. Moves by China’s
central bank to inject more liquidity into its banking system
Tuesday were also seen as bullish for gold and silver, as
well as other raw commodity markets.
Traders and investors are looking forward
to the Jackson Hole, Wyoming U.S. Federal Reserve confab
next week, and the mid-September FOMC meeting. Many raw
commodity and stock market bulls are hoping the Fed will
soon announce a fresh quantitative easing of monetary policy--nicknamed
QE3. The minutes of the last FOMC meeting are due out Wednesday.
Reports overnight said India’s festive
season gold imports this year will likely be half of last
year’s rate, at 200 to 250 tons for 2012. Reasons
for the slack demand include perceived high gold prices
and a poor monsoon season depressing consumer demand. The
market place shrugged off that potentially bearish news,
as traders reckoned the slip in Asian physical gold demand
is not fresh news and had already been factored into prices.
The U.S. dollar index was solidly lower
Tuesday and hit a fresh four-week low. The greenback bulls
are fading and a downtrend line is in place on the daily
bar chart. Meantime, crude oil prices were higher Tuesday
and hit another fresh three-month high. Oil bulls have upside
near-term technical momentum. The precious metals markets
will continue to look closely at how these two key “outside
markets” trade on a daily basis.
The London P.M. gold fix is $1,639.50 versus
the previous London P.M. fixing of $1,615.00.
Technically, December gold futures prices
closed near the session high Tuesday and hit a fresh 2.5-month
high. Bulls gained fresh upside technical momentum as prices
are now on the verge of a bullish upside “breakout”
from the choppy and sideways trading range that has been
in place on the daily chart for nearly three months. The
gold market bulls Tuesday also regained the slight overall
near-term technical advantage. The gold bulls’ next
upside price breakout objective is to produce a close above
solid technical resistance at the June high of $1,646.40.
Bears' next near-term downside price objective is closing
prices below solid technical support at the August low of
$1,586.30. First resistance is seen at the June high of
$1,646.40 and then at $1,650.00. First support is seen at
$1,633.30 and then at $1,625.00. Wyckoff’s Market
Rating: 5.5
September silver futures prices closed near
the session high again Tuesday and hit a fresh 2.5-month
high. This week’s price action in silver has produced
a big and bullish upside breakout from a sideways and choppy
trading range that had been in place on the daily bar chart.
Silver bulls have gained the overall near-term technical
advantage and have fresh upside momentum. Bulls’ next
upside price breakout objective is closing prices above
solid technical resistance at the June high of $29.915 an
ounce. The next downside price breakout objective for the
bears is closing prices below solid technical support at
$27.50. First resistance is seen at $29.50 and then at $29.915.
Next support is seen at $29.00 and then at Tuesday’s
low of $28.61. Wyckoff's Market Rating: 6.0.
September N.Y. copper closed up 760 points
at 344.75 cents Tuesday. Prices closed nearer the session
high on short covering and bargain hunting. It was a “risk-on”
day in the market place today as the key outside markets
were bullish for copper—the U.S. dollar index was
solidly lower and crude oil prices were higher. 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 the
July high of 355.65 cents. The next downside price breakout
objective for the bears is closing prices below solid technical
support at the August low of 328.85 cents. First resistance
is seen at Tuesday’s high of 346.65 cents and then
at 350.00 cents. First support is seen at 340.00 cents and
then at Tuesday’s low of 337.00 cents. Wyckoff's Market
Rating: 5.0.