Comex Gold Higher on Bargain Hunting, Safe-Haven Demand

Gold is trading higher Wednesday as traders and investors buy on the gold price dip. Many also still go to gold as the safe haven as the EU debt crisis continues to spark concern.

11/02/2011 @ 9:53AM
By Jim Wyckoff
Forbes

(Kitco News) - Comex December gold futures are trading higher Wednesday morning as traders and investors once again stepped in to “buy the dip” following some selling pressure this week. Safe-haven buying interest is also featured Wednesday amid the latest developments in the ongoing EU debt crisis. December gold last traded up $21.20 at $1,733.30 an ounce. Spot gold last traded up $11.40 an ounce at $1,731.75. December Comex silver last traded up $1.089 at $33.82 an ounce.

Greece will hold a referendum on whether to implement last week’s EU bailout package for that beleaguered nation. This has once again unnerved the market place. Given the Greek public’s overt displeasure for austerity measures, most believe any referendum may not support a bailout package. This has once again put the EU debt crisis back on the front burner of the market place this week. If the EU debt crisis once again escalates to the downside, I suspect gold prices would continue to be supported on safe-haven investor demand.

The market place is also awaiting the results of the latest U.S. FOMC meeting, due out Wednesday afternoon. Fed Chairman Bernanke will hold a press conference after the meeting. Traders will be closely scrutinizing Bernanke’s comments for any hints of further easing of monetary policy, which would be bullish for the precious metals.

The U.S. dollar index is weaker Wednesday, on a corrective pullback from solid gains scored Monday and Tuesday. Today’s pullback in the dollar index is a bullish factor for the precious metals and other commodity markets. However, the dollar index bulls have gained fresh upside near-term technical momentum this week.

Crude oil prices are higher Wednesday morning, and that’s also a bullish “outside market” force for the precious metals. Crude oil prices remain in a near-term uptrend.

U.S. economic data due for release Wednesday includes the FOMC meeting results, the weekly MBA mortgage applications survey, the ADP employment report, the U.S. Treasury’s quarterly refunding announcement and the weekly DOE liquid energy stocks report.

The London A.M. gold fixing was $1,731.00 versus the previous P.M. fixing of $1,699.00.

Technically, December gold bulls still have the overall near-term technical advantage and no chart damage occurred this week. Prices are still in a five-week-old uptrend on the daily bar chart. Bulls’ next upside technical objective is to produce a close above solid technical resistance at last week’s high of $1,754.00. Bears’ next near-term downside price objective is closing prices below solid technical support at this week’s low of $1,681.20. First resistance is seen at the overnight high of $1,738.30 and then at this week’s high of $1,746.50. First support is seen at the overnight low of $1,715.50 and then at $1,700.00.

December silver futures bulls still have the overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price objective is producing a close above technical resistance at last week’s high of $35.70 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $31.23. First resistance is seen at $34.50 and then at Tuesday’s high of $34.725. Next support is seen at $33.50 and then at $33.00.

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