Comex gold futures prices ended the U.S. day session moderately higher Thursday. The yellow metal traded near steady in early trading and then advanced when the U.S. dollar index came under selling pressure following some fresh, weak U.S. economic data. Higher crude oil futures prices Thursday were the other bullish outside market force supporting the precious metals. December gold futures are now trading comfortably above the psychological level of $1,600.00. However, near-term trading, overall, remains choppy, sideways and within a well-defined range on the daily chart. December gold last traded up $12.30 an ounce at $1,618.90. Spot gold was last quoted up $13.70 an ounce at $1,617.25. September Comex silver last traded up $0.388 at $28.20 an ounce.
The Philadelphia Fed business survey was released Thursday morning and it came in weaker than expected. That followed a weak housing starts report for July. Other U.S. data issued Thursday was a mixed bag, but overall the fresh economic data helped to pressure the U.S. dollar index, which in turn helped to boost gold and silver.
In overnight news, the World Gold Council reported central bank purchases of gold were more than double the rate seen at this time last year. However, there was a 7% annualized drop in global gold demand in the second quarter, including a 56% drop in demand coming from India. The Gold Council said the stepped-up central bank purchases show “through all the uncertainty, it is clear that gold’s fundamental properties as a vehicle for capital preservation and a source of liquidity continue to endure.” The central banks are the “ultimate longer-term investors,” said the Council.
In other overnight news, there were reports Chinese leader Wen Jiabao said his country may have to ease monetary policy soon. However, the market place shrugged off his comments. European stock markets were quiet and range-bound. U.K. retail sales data was released and it came out stronger than expected. Traders are once again looking to a fresh batch of U.S. economic data Thursday for price direction.
Many market participants are on the sidelines, or are tentative, as they wait to see if the U.S. Federal Reserve will act to implement another round of quantitative easing of U.S. monetary policy—nicknamed QE3. Any such action could occur at the Fed’s Jackson Hole, Wyoming annual gathering in late-August, or at the next meeting of the Fed’s Federal Open Market Committee in September.
The U.S. dollar index was firmer in early trading Thursday but then sold off on the release of the U.S. economic data. The greenback is seeing choppy trading action recently, but the bulls maintain the overall near-term technical advantage. Meantime, crude oil prices were near steady early Thursday morning and then rallied as the session progressed. Oil bulls still have some of upside near-term technical momentum as prices poked to a fresh three-month high Thursday. The precious metals markets will continue to look closely at how these two key “outside markets” trade on a daily basis.
The London P.M. gold fix is $1,604.50 versus the previous London P.M. fixing of $1,601.75.
Technically, December gold futures prices closed nearer the session high Thursday. The choppy, sideways and range-bound trading action continues as it has for the past two months. The gold market bulls and bears are on an overall level near-term technical playing field. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,646.40. Bears' next near-term downside price objective is closing prices below solid technical support at the July low of $1,559.50. First resistance is seen at Thursday’s high of $1,622.00 and then at last week’s high of $1,633.30. First support is seen at Thursday’s low of $1,603.00 and then at this week’s low of $1,592.10. Wyckoff’s Market Rating: 5.0
September silver futures closed up $0.388 an ounce at $28.20 Thursday. Prices closed near the session high and closed at a fresh six-week high close. Prices are still choppy, sideways and range-bound, but the market is now in the very upper boundary of its trading range, suggesting an upside breakout is possible soon. Silver bears still have the slight overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $28.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of $26.105. First resistance is seen at last week’s high of $28.315 and then at $28.445. Next support is seen at $28.00 and then at Thursday’s low of $27.66. Wyckoff's Market Rating: 4.5.
September N.Y. copper closed up 325 points at 338.20 cents Thursday. Prices closed nearer the session high. The key “outside markets” were bullish for copper Thursday, as the U.S. dollar index was lower and crude oil prices were higher. Copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 345.70 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 340.00 cents and then at 342.50 cents. First support is seen at 335.00 cents and then at this week’s low of 333.40 cents. Wyckoff's Market Rating: 4.0.
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By Jim Wyckoff,
contributing to Kitco News; jwyckoff@kitco.com
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