Comex Gold Ends Solidly Higher on Fresh Technical Buying, Bullish "Outside Markets"

Gold prices ended Tuesday sharply higher on fresh technical buying and bullish "outside markets." The markets are now awaiting the European Central Bank meeting on Thursday and many experts are predicting further easing of EU monetary policy.

By Jim Wyckoff Of Kitco News
7/03/2012 @ 2:09PM
Forbes

Comex gold futures extended early-session gains to end the U.S. day session sharply higher Tuesday. Short covering, bargain hunting and fresh technical buying were featured as prices pushed to a fresh two-week high of $1,625.70 an ounce. The U.S. dollar weakened as the trading session progressed, while crude oil prices were sharply higher. These two key “outside markets” were in a bullish posture for the precious metals Tuesday. August gold last traded up $23.30 at $1,621.10 an ounce. Spot gold was last quoted at $1,621.25. September Comex silver last traded up $0.771 at $28.27 an ounce.

The market place is now awaiting the European Central Bank meeting on Thursday. Many market watchers are expecting further easing of EU monetary policy soon. Such would be at least initially bullish for the raw commodity markets, including the precious metals. European stocks were firmer Tuesday on the EU rate-cut hopes. Tuesday’s EU producer price data showed Euro zone inflation slowed to its lowest rate in two years, which further stoked hopes for an imminent ECB rate cut.

Traders are also awaiting Friday morning’s U.S. jobs report. It’s likely to be a quieter trading week this week, as the U.S. Independence Day holiday is Wednesday and many traders likely opting to take the entire week off.

The U.S. dollar index was lower Tuesday as the bulls have faded. Meantime, Nymex crude oil futures prices sharply higher on fresh saber-rattling coming from Iran. There are now early clues the crude oil market has put in a bottom and the dollar index has topped out. Such a scenario would be bullish for the precious metals.

The London P.M. gold fix is $1,617.50 versus the previous London P.M. fixing of $1,592.05.

Technically, August gold futures prices closed nearer the session high Tuesday and scored a fresh two-week high as the bulls gained some more fresh upside technical momentum. The gold market bulls have regained the slight overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,642.40. Bears’ next near-term downside price objective is closing prices below solid technical support at last week’s low of $1,547.60. First resistance is seen at Tuesday’s high of $1,625.70 and then at $1,635.40. First support is seen at $1,607.80 and then at $1,600.00. Wyckoff’s Market Rating: 5.5

September silver futures prices closed nearer the session high Tuesday and hit a fresh two-week high on short covering and bargain hunting. Silver bears still have the overall near-term technical advantage. Prices are still in a four-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $29.135 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $26.105. First resistance is seen at Tuesday’s high of $28.445 and then at $29.00. Next support is seen at $28.00 and then at Tuesday’s low of $27.39. Wyckoff’s Market Rating: 4.0.

September N.Y. copper closed up 700 points 353.90 cents Tuesday. Prices closed nearer the session high and hit a fresh six-week high. The key “outside markets” were bullish for copper Tuesday as the U.S. dollar index was lower and crude oil prices were sharply higher. Copper bulls have gained good upside technical momentum. Copper bulls have regained the near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 362.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of 325.00 cents. First resistance is seen at Tuesday’s high of 355.65 cents and then at 359.00 cents. First support is seen at 350.00 cents and then at Tuesday’s low of 346.30 cents. Wyckoff’s Market Rating: 6.0.

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