Gold Bullion (GOLD)

[CaptWhizbang]

A.M. Kitco Metals Roundup: Comex Gold Firmer amid Consolidation on Charts

Tuesday June 05, 2011 8:05 AM


Comex gold futures prices are modestly higher in early U.S. trading Tuesday. The market early this week is consolidating on the charts following last Friday’s big price gains. The gold market bulls still have some upside near-term technical momentum. August gold last traded up $3.60 at $1,617.50 an ounce. Spot gold was last quoted down $2.40 an ounce at $1,616.75. July Comex silver last traded up $0.213 at $28.22 an ounce.

The overall market place is a bit calmer Tuesday, as there were no major, market-moving developments overnight to shake things up. There will be a Group of Seven teleconference late Tuesday to discuss the European Union debt and financial crisis. This comes ahead of two key events traders are awaiting later this week: a European Central Bank officials meeting on Wednesday and U.S. Federal Reserve Chairman Ben Bernanke’s testimony before U.S. lawmakers on Thursday. The market place is wondering if the U.S. and/or EU will hint of further easing of their monetary policies this week, in the wake of their recent weaker economic data.

There was another disappointing economic report from Spain Tuesday, as its services sector PMI fell sharply. The overall EU services PMI came in slightly better than expected but was still weak, overall. Meantime, China received a positive economic report overnight as services activity rose to a 19-month high.

The U.S. dollar index is trading higher Tuesday morning. There is still safe-haven demand moving to the greenback. The dollar index bulls still have upside near-term technical momentum. Meantime, Nymex crude oil futures are weaker and hit a fresh eight-month low of $81.21 a barrel on Monday. Crude oil remains in a fully bearish overall fundamental and technical posture. The overall postures of the U.S. dollar index and crude oil remain underlying bearish factors for the raw commodity sector.

U.S. economic data due for release Tuesday includes the weekly Goldman Sachs and Johnson Redbook retail sales reports, the ISM non-manufacturing survey, and the global services PMI.

Technically, gold futures bulls have gained upside near-term technical momentum recently. Bulls and bears are on a level near-term technical playing field. On a longer-term technical basis, the gold bulls never lost their overall technical advantage as prices are still in an 11-year-old uptrend from the 2001 low of $255 an ounce. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,650.00. Bears' next near-term downside price objective is closing prices below what is now psychological support at $1,600.00. First resistance is seen at last week’s high of $1,632.00 and then at $1,640.00. First support is seen at Monday’s low of $1,610.00 and then at $1,600.00.

July silver futures bears still have the overall near-term technical advantage and have not garnered the strong safe-haven demand that has gold recently. Silver still sees a three-month-old downtrend 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 Monday’s high of $28.68 and then at $28.895. Next support is seen at Monday’s low of $27.955 and then at $27.50.

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

http://www.kitco.com/reports/KitcoNews20120605JW_am.html