 | P.M. Kitco Metals Roundup: Comex Gold Ends Lower on Firmer U.S. Dollar Index, Weak Near-Term Technical Posture 02 February 2010, 01:59 p.m. By Jim Wyckoff Of Kitco News http://www.kitco.com/ |
(Kitco News) - Comex gold futures prices closed moderately lower Wednesday, amid a firmer U.S. dollar index and on the bearish near-term technical tilt of the market. Comex April gold last traded down $8.60 at $1,331.70 an ounce. Spot gold last traded down $10.80 at $1,331.50.
The U.S. dollar index rose modestly Wednesday on some short covering, which was a slightly bearish factor for the precious metals. However, the dollar index bears still have overall near-term technical advantage and did hit a fresh three-month low overnight. Gold bulls have been disappointed recently that gold prices have not seen more upside support from the weaker dollar index.
Egypt's continuing civil unrest and the uncertainty regarding the situation will keep the sellers in gold at least somewhat restrained for the near term. There were clashes between protesters on the streets in Cairo Wednesday. In fluid situations like the one in Egypt at present, no one can predict if the worst is over, or is yet to come, regarding demonstrations and violence. Precious metals traders are still keeping a close eye on the situation in Egypt.
Crude oil prices have backed down from it's recent highs and were trading near steady levels Wednesday. The crude market had reached strong overhead resistance at the January high of $93.46, basis the March Nymex futures contract. If crude oil prices do back off further, that would be a bearish underlying factor for the gold market.
Traders are awaiting Friday's key U.S. jobs report. That report is expected to show non-farm payrolls grew by around 135,000 in January. Stronger U.S. jobs growth in Friday's report would likely support the U.S. dollar index and be a negative for the precious metals markets.
The London P.M. gold fix was $1,337.00 versus the previous P.M. fixing of $1,331.50.
Technically, April Comex gold futures prices closed nearer the session low Wednesday. Gold prices are still in a four-week-old downtrend on the daily bar chart, but trading action has become choppy just recently. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at last week's high of $1,354.00. Bears' next near-term downside price objective is closing prices below solid technical support at last week's low of $1,309.10. First resistance is seen at $1,340.00 and then at today's high of $1,345.60. Support is seen at today's low of $1,327.30 and then at this week's low of $1,323.60. Wyckoff's Market Rating: 5.0.
March silver futures closed down 24.9 cents at $28.265 an ounce Wednesday. Prices closed nearer the session low after hitting a fresh two-week high early on. A firmer U.S. dollar index and weaker crude oil prices did help to pressure silver Wednesday. The silver bulls still have the overall near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at last week's low of $26.30. Bulls' next upside price objective is producing a close above solid technical resistance at $29.49 an ounce. First resistance is seen at Wednesday's high of $28.72 and then at $29.00. Next support is seen at $28.00 and then at this week's low of $27.52. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed up 15 points at 454.85 cents Wednesday. Prices closed nearer the session high and poked to another fresh contract and all-time record high. The bulls have the solid near-term technical advantage. Bulls' next upside objective is pushing and closing prices above solid technical resistance at 475.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 440.00 cents. First resistance is seen at Wednesday's record high of 456.20 cents and then at 458.00 cents. First support is seen at Wednesday's low of 451.60 cents and then at 450.00 cents. Wyckoff's Market Rating: 9.0.
By Jim Wyckoff of Kitco News; jwyckoff@kitco.com
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