Gold Bullion (GOLD)

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P.M. Kitco Metals Roundup: Comex Gold Ends Solidly Up, Hits 4-Week High, on Bullish Outside Market Forces

Wednesday June 06, 2011 2:13 PM


Comex gold futures prices ended the U.S. day session solidly higher hit a four-week high Wednesday. The yellow metal was boosted by fresh technical buying and by a “risk-on” trading day in the market place, which boosted most raw commodity markets, including the precious metals. August gold last traded up $13.80 at $1,630.70 an ounce. Spot gold was last quoted up $12.30 an ounce at $1,629.75. July Comex silver last traded up $1.135 at $29.535 an ounce.

The market place was in a firm “risk-on” mood Wednesday, as traders and investors are hoping the central banks of the U.S. and European Union move soon to ease their monetary policies. The European Central Bank meeting Wednesday produced no such results. Fed Chairman Bernanke speaks to U.S. lawmakers on Thursday, and traders are wondering if he will hint at further U.S. easing of monetary policy. Many reckon it may be a bit too soon for the EU and U.S. to start fresh monetary easing strategies, but they also reckon odds are better than 50-50 that such will indeed occur in the coming weeks or months.

Recent weak economic activity out of the U.S., EU (and China) has been a bearish drag on many markets, and it has become increasingly likely the central banks will have to act to stimulate their economies with easier money policies. That would be at least temporarily bullish for most markets, including stock indexes and commodities.

In overnight news, there was fresh, weak economic data coming out of Germany, which has been the economic stalwart of the EU. Also, Moody’s has lowered credit ratings on several German banks. The EU debt crisis is still a major headache for the market place, but so far Wednesday traders and investors have chosen to focus on the bullish prospects of easier money policies.

The U.S. dollar index traded lower Wednesday on profit-taking pressure from recent gains. The dollar index bulls still have the overall near-term technical advantage. Meantime, Nymex crude oil futures were higher on short covering in a bear market. Crude oil remains in a bearish overall fundamental and technical posture.

The London P.M. gold fix is $1,635.00 versus the previous London P.M. fixing of $1,606.00.

Technically, August gold futures prices closed near mid-range Wednesday and hit a fresh four-week high. The gold bulls gained some more upside technical momentum Wednesday. Prices saw an upside breakout from a bullish pennant pattern on the daily chart. Bulls have regained the slight near-term technical advantage in gold for the first time in many weeks. 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 psychological support at $1,600.00. First resistance is seen at Wednesday’s high of $1,642.40 and then at $1,650.00. First support is seen at Wednesday’s low of $1,616.50 and then at this week’s low of $1,610.00. Wyckoff’s Market Rating: 5.5

July silver futures prices closed nearer the session high and hit a fresh four-week high Wednesday. The silver bulls gained fresh upside technical momentum Wednesday as prices saw an upside breakout from a sideways trading range on the daily chart. A three-month-old downtrend on the daily bar chart was also negated Wednesday. Bulls’ next upside price breakout objective is closing prices above major psychological resistance at $30.00 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 Wednesday’s high of $29.865 and then at $30.00. Next support is seen at $29.00 and then at Wednesday’s low of $28.41. Wyckoff's Market Rating: 4.5.

July N.Y. copper closed up 825 points 337.15 cents Wednesday. Prices closed nearer the session high and saw short covering in a bear market. The key “outside markets” were bullish for copper Wednesday, as the U.S. dollar index was lower and crude oil prices were higher. Copper bears still have the overall near-term technical advantage. Prices are still in a five-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 345.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 308.00 cents. First resistance is seen at Wednesday’s high of 338.20 cents and then at 340.00 cents. First support is seen at 335.00 cents and then at 332.50 cents. Wyckoff's Market Rating: 3.0.

http://www.kitco.com/reports/KitcoNews20120606JW_pm.html