Friday, November 18, 2011
P.M. Kitco Metals Roundup: Comex Gold Hammered Lower Amid Bearish "Outside Markets;" Near-Term Chart Damage Inflicted
(Kitco News) - Comex gold futures prices ended the U.S. day session sharply lower Thursday. The market was pressured by a general sell off in the raw commodity sector, of which gold on this day decided to be included--as opposed to a safe-haven asset the yellow metal decides to be on other trading days. The key “outside markets” were in a fully bearish posture for the precious metals Thursday, as the U.S. dollar index was higher and crude oil prices were sharply lower. Some near-term technical damage was inflicted in the gold market Thursday as prices dropped below what was solid near-term technical support at last week's low of $1,736.60. December gold last traded down $56.00 an ounce at $1,718.30. Spot gold last traded down $45.00 an ounce at $1,717.75. December Comex silver last traded down $2.267 at $31.555 an ounce.
The European Union financial and sovereign debt crisis was ratcheted up yet another notch Thursday when bond yields in Spain pushed above the critical 7% level. Other EU nations’ bond yields also rose Thursday, which suggests financial liquidity in the EU is slowly drying up. On Wednesday it was France and its financial condition that were a concern in the market place. The EU debt crisis is far from being resolved and could blow up at any time. While not evident the past few days and certainly not on Thursday, the heightened EU uncertainty remains an overall bullish underlying factor for the gold market.
The U.S. dollar index again traded higher Thursday morning and hit another fresh five-week high overnight, on safe-haven demand due to the EU debt crisis. The dollar index bulls have gained fresh upside near-term technical momentum this week and that is bearish for the precious metals.
Crude oil prices traded sharply lower on profit taking Thursday, after hitting a fresh five-month high of $103.37 a barrel overnight. While crude was a negative “outside market” force for the precious metals Thursday, crude prices remain in a solid near-term uptrend and that’s an overall bullish underlying fundamental for gold and silver.
If recent history plays out again, gold prices will become a value or bargain hunting buying opportunity on this significant price dip.
The London P.M. gold fixing was $1,742.50 versus the previous P.M. fixing of $1,756.00.
Technically, December gold futures prices closed nearer the session low Thursday as the market lurched to a fresh two-week low. Some near-term technical damage was inflicted Thursday, as a seven-week-old uptrend on the daily bar chart was at least temporarily negated as prices dropped below what was solid technical support at the last “reaction low” on the daily chart, which is last week’s low of $1,736.60, to negate the near-term price uptrend. Bulls still have the slight overall near-term technical advantage but are fading fast and need to show fresh power soon. Bulls' next upside technical objective is to produce a close above solid technical resistance at the October high of $1,754.00. Bears' next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at $1,736.60 and then at 1,754.00. First support is seen at Thursday’s low of $1,711.00 and then at $1,700.00. Wyckoff's Market Rating: 5.5.
December silver futures prices closed nearer the session low Thursday and hit a fresh three-week low. Some near-term technical damage was inflicted in silver Thursday, as a seven-week-old uptrend on the daily bar chart was negated. Bulls have faded badly and are now on a level near-term technical playing field with the bears. Silver bulls' next upside price objective is producing a close above solid technical resistance at this week’s high of $34.92 an ounce. The next downside price breakout objective for the bears is closing prices below major psychological support at $30.00. First resistance is seen at $32.00 and then at $32.50. Next support is seen at Thursday’s low of $31.04 and then at $30.50. Wyckoff's Market Rating: 5.0.
December N.Y. copper closed down 1,145 points 337.00 cents Thursday. Prices closed near the session low. The key “outside markets” were fully bearish for copper today, as the U.S. dollar index was higher and crude oil and stock index prices were sharply lower. Copper bears have regained the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 358.55 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of 331.80 cents. First resistance is seen at 340.00 cents and then at 345.00 cents. First support is seen at Thursday’s low of 336.20 cents and then at 331.80 cents. Wyckoff's Market Rating: 4.0.
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