Gold Futures Index (GOLD)

[Pro-Life]

Comex Gold Ends Firmer, At Bullish Monthly High Close

1 February 2012, 2:11 p.m.
By Jim Wyckoff
Of Kitco News
http://www.kitco.com/

http://www.kitco.com/reports/KitcoNews20120201JW_pm.html

(Kitco News) - Comex April gold futures prices ended the U.S. day session modestly higher Wednesday, with prices hitting another fresh seven-week high early on. The bulls have near-term upside technical momentum as the market on Tuesday produced a technically bullish monthly high close on the last trading day of the month. April gold last traded up $5.40 at $1,745.80 an ounce. Spot gold was last quoted up $6.50 an ounce at $1,743.75. March Comex silver last traded up $0.478 at $33.74 an ounce.

The weaker U.S. dollar index Wednesday was a bullish “outside market” force supporting the precious metals markets. The dollar index bears have downside near-term technical momentum. Meantime, crude oil prices did back down from early-session highs, which did help to push gold down from its daily high. Crude oil bulls still have the overall near-term technical advantage, and that’s bullish for the precious metals. Crude oil and the U.S. dollar index will remain the two key “outside markets” that have a daily influence on gold and silver price moves.

There were a few fresh developments coming out of the European Union debt crisis Wednesday. German and Portuguese debt auctions were fairly well-subscribed, and some better-than-expected EU economic data was also released Wednesday. A debt- restructuring deal between the Greek government and the private sector has still not been reached, although there was talk again Wednesday that a deal is close. The EU debt crisis appears to have stabilized. However, if recent history plays out again the EU debt crisis will be back on the front burner of the market place. The EU debt crisis is still a major underlying bullish factor for the gold market, due to gold’s safe-haven asset status.

The London P.M. gold fixing was $1,740.00 versus the previous P.M. fixing of $1,744.00.

Technically, April gold futures prices closed near mid-range Wednesday and hit another fresh seven-week high. Prices Tuesday closed at a bullish monthly high close. Gold bulls have the solid overall near-term technical advantage and still have upside near-term technical momentum on their side. A steep four-week-old uptrend is in place on the daily bar chart. Bulls' next upside technical breakout objective is to produce a close above solid technical resistance at the December high of $1,769.70. Bears' next near-term downside price objective is closing prices below chart trend-line and psychological support at $1,700.00. First resistance is seen at Wednesday’s high of $1,754.00 and then at $1,760.00. First support is seen at Wednesday’s low of $1,735.40 and then at $1,727.00. Wyckoff's Market Rating: 7.5.

March silver futures prices closed nearer the session high Wednesday. Silver bulls have the overall near-term technical advantage. Prices Tuesday hit a 10-week high. A four-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $35.68 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $31.525. First resistance is seen at this week’s high of $34.13 and then at $34.50. Next support is seen at $33.50 and then at Wednesday’s low of $33.07. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed up 490 points 383.90 cents Wednesday. Prices closed nearer the session high. A weaker U.S. dollar index today boosted copper prices. Copper bulls have the near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above major psychological resistance at 400.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 367.50 cents. First resistance is seen at Tuesday’s high of 387.60 cents and then at 390.00 cents. First support is seen at 380.00 cents and then at Wednesday’s low of 376.30 cents. Wyckoff's Market Rating: 6.5.

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By Jim Wyckoff contributing to Kitco News; [e-mail]