BA:Comex Gold futures prices ended higher as the EU debt crisis drags on
Comex Gold futures prices ended the U.S. day session higher and hit a fresh three-week high on fresh safe-haven buying interest as the European Union debt crisis drags on. Gains in gold were limited and Silver prices were pressured by bearish "outside markets" that included a sharply higher U.S. dollar index and sharply lower Crude Oil prices. August gold last traded up $7.60 at $1,549.20 an ounce. Spot gold last traded up $4.40 an ounce at $1,549.00. December Comex silver last traded down $0.815 at $35.745 an ounce.
The ongoing European Union sovereign debt crisis supported gold Monday, on safe-haven demand due to the uncertainty over the issue. Early this week the focus is on Italy and some upcoming stress tests on its financial institutions. Credit default swap spreads have hit record levels early this week as worries have intensified that the EU debt problems could morph into a debt contagion in Europe or beyond. The Euro currency was under strong selling pressure Monday on the EU concerns. Last week the EU debt crisis focus was on Portugal, amid fresh credit agency rating downgrades and warnings. The week before that it was Greece. Next week, it may be a different EU country in the debt crisis spotlight.
The U.S. dollar index traded sharply higher Monday and hit a fresh two-week high, on short covering and safe-haven demand due to the EU debt worries. The dollar index has been trading sideways at lower price levels for two months, which is suggestive of a market low being in place. The stronger U.S. dollar did limit the upside in gold Monday and put solid downside price pressure on silver. History has shown that both gold and the dollar can rally at the same time, during keener investor anxiety in the market place.
Crude oil prices were sharply lower Monday. Crude oil bulls have faded badly amid the weak U.S. jobs report on Friday and the fresh EU debt concerns. Weaker crude oil prices also limited buying interest in gold, but more so for silver.
The market place is still digesting Friday's surprisingly weak June U.S. employment report. The much weaker-than-expected non-farm jobs number is bullish for gold, as it has curtailed investor risk appetite and steered traders back into the safe-haven assets like the precious metals markets.
Good physical demand for gold recently has also underpinned the market, reports said.
The London P.M. gold fixing was $1,555.50 versus the previous P.M. fixing of $1,541.50.
Technically, August Gold futures closed near mid-range Monday and hit a fresh three-week high. Gold bulls have the solid overall near-term technical advantage and have recently gained fresh upside momentum. Bulls' next near-term upside technical objective is to produce a close above strong technical resistance at the June high of $1,559.30. Bears' next near-term downside price objective is closing prices below solid technical support at $1,520.00. First resistance is seen at $1,559.30 and then at $1,570.00. First support is seen at Monday's low of $1,542.10 and then at $1,534.50. Wyckoff's Market Rating: 7.0.
December Silver futures closed nearer the session low after hitting a fresh four-week high early on. Prices today also scored a bearish "outside day" down on the daily bar chart, whereby the day's high was higher and low was lower than the previous day's trading range, with a lower close. The silver bulls still have the overall technical advantage in silver. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of $33.42. Bulls' next upside price objective is producing a close above solid technical resistance at $37.84 an ounce. First resistance is seen at $36.50 and then at today's high of $36.95. Next support is seen at Monday's low of $35.60 and then at $35.115. Wyckoff's Market Rating: 6.0.
December N.Y. Copper closed down 545 points 437.20 cents Monday. Prices closed nearer the session low and saw profit-taking pressure after hitting a three-month high on Friday. The market was pressured by bearish "outside markets" today that saw sharply lower Crude Oil prices and a sharply higher U.S. dollar index. The copper bulls still have the solid near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 425.00 cents. First resistance is seen at 440.00 cents and then at Monday's high of 442.95 cents. First support is seen at Monday's low of 435.00 cents and then at 432.50 cents. Wyckoff's Market Rating: 7.0.
