Gold Bullion (GOLD)

[CaptWhizbang]

Comex Gold Ends Higher on Fresh Safe-Haven Buying Interest

Wednesday May 30, 2012 2:02 PM

Comex gold futures prices ended the U.S. day session higher and near the daily high Wednesday. The gold market saw some short covering and bargain hunting, but more importantly saw some fresh safe-haven buying demand surface amid the keener risk aversion in the market place Wednesday. The fact the key “outside markets” were in a fully bearish posture for the precious metals Wednesday, yet gold posted good gains anyway, is indicative of good safe-haven buying interest entering the gold market. August gold last traded up $15.00 at $1,566.00 an ounce. Spot gold was last quoted up $9.50 an ounce at $1,565.00. July Comex silver last traded up $0.214 at $28.005 an ounce.

Wednesday’s impressive rebound in gold prices hints that if the European Union sovereign debt and financial crisis escalates in the coming days or weeks, then the precious yellow metal could see more serious safe-haven investment demand to lift prices higher.

The market place Wednesday did tilt toward a “risk-off” trading day. The U.S. and overseas stock indexes were lower, while the U.S. dollar index and U.S. Treasury prices traded solidly higher. U.S. 10-year Treasury notes hit a record low yield Wednesday.

The markets are still reacting to Tuesday’s news that Spain’s sovereign debt was downgraded by Egan-Jones. There are concerns regarding the entire Spanish banking system after the European Central Bank reportedly said it will not support funding of the bailout of Spain’s largest bank, Bankia. In other news Wednesday, a poll showed Greece citizens want to stay in Euro zone. Also, the European Commission reportedly wants more banking union among EU nations.

Reports out of China overnight said China’s new economic stimulus package will not be at all large. That was bearish for the raw commodity market sector Wednesday.

The main data point of the week is the U.S. jobs report due out on Friday morning. Trading in many markets could be more subdued ahead of that report, and then turn more active in the aftermath of the report. The key non-farm payrolls figure in the jobs report is expected to have gained around 150,000 in May.

The U.S. dollar index traded higher Wednesday and hit a fresh 22-month high. The dollar index bulls have good upside near-term technical momentum on safe-haven demand. Meantime, Nymex crude oil futures were sharply lower and hit a fresh 6.5-month low of $87.49 a barrel overnight. Crude oil remains in a fully bearish overall fundamental and technical posture.

The London P.M. gold fixing was $1,540.00 versus the previous London P.M. fixing of $1,579.50.

Technically, August gold futures prices closed nearer the session high Wednesday. Gold market bulls were encouraged by the market’s ability to hold above strong chart support at the May low of $1,529.30. Gold bears do still have the overall near-term technical advantage. A three-month-old downtrend is still in place on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,600.00. Bears' next near-term downside price objective is closing prices below solid technical support at the May low of $1,529.30. First resistance is seen at $1,575.00 and then at this week’s high of $1,585.70. First support is seen at $1,550.00 and then at $1,540.00. Wyckoff's Market Rating: 3.5.

July silver futures prices closed nearer the session high Wednesday and saw short covering and bargain hunting. Silver bears still have the solid overall near-term technical advantage. A three-month-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $29.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $26.50. First resistance is seen at $28.50 and then at this week’s high of $28.76. Next support is seen at $27.71 and then at Wednesday’s low of $27.355. Wyckoff's Market Rating: 3.0.

July N.Y. copper closed down 715 points 339.10 cents Wednesday. Prices closed nearer the session low and hit a fresh 5.5-month low. The key “outside markets” were fully bearish for copper Wednesday—the U.S. dollar index was higher and crude oil prices were lower. Copper bears have the overall near-term technical advantage and gained fresh downside momentum Wednesday. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 350.85 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of 327.00 cents. First resistance is seen at 340.00 cents and then at 343.00 cents. First support is seen at Wednesday’s low of 337.25 cents and then at 335.00 cents. Wyckoff's Market Rating: 3.0.

http://www.kitco.com/reports/KitcoNews20120530JW_pm.html