FBS: Comex Gold Trading Near Steady as Market Pauses, Consolidates Recent High Volatility
Comex December gold futures prices are trading around unchanged levels Wednesday morning as traders are pausing a bit to let the market consolidate the recent big daily price swings. The key “outside markets” are also not straying too far from steady price levels Wednesday morning, as the U.S. dollar index is slightly higher and crude oil prices are modestly weaker. Firmer U.S. and European stock indexes are pulling some investment demand away from the precious metals Wednesday morning. December gold last traded down $4.20 an ounce at $1,648.40 an ounce. Spot gold last traded down $3.30 an ounce at $1,647.00. December Comex silver last traded down $0.421 at $31.115 an ounce.
U.S. and European stock markets are mostly firmer Wednesday, as risk appetite has at least temporarily increased this week, on news reports the European Union sovereign debt situation may be a bit closer to being shored up following ongoing talks among EU and IMF leaders. Wednesday this has pulled some investment demand away from safe-haven gold. It appears the market place has moved the EU debt crisis off the front burner this week and its focusing on other matters, such as fresh economic reports.
The U.S. dollar index is trading just slightly higher Wednesday morning. The dollar index bulls have the overall near-term technical advantage, which has been an underlying bearish factor for the precious metals.
Crude oil futures prices are trading slightly lower Wednesday after posting strong gains Tuesday. Crude bulls have gained fresh upside technical momentum following the big gains Tuesday, and that’s an underlying bullish factor for gold and silver.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders and the weekly DOE energy stocks report.
The London A.M. gold fixing was $1,655.00 versus the previous P.M. fixing of $1,659.00.
Technically, December gold futures prices closed near mid-range Tuesday. Prices Monday hit a fresh 2.5-month low of $1,535.00, but have made a very strong, quick rebound from that spike low to suggest the bears became exhausted at the lower price level and that a near-term market low is in now in place. However, serious near-term technical damage has been inflicted in gold recently and the bulls have heavy lifting to do to restart a near-term price utprend. Prices are still in a steep three-week-old downtrend on the daily bar chart. Bulls’ next upside technical objective is to produce a close above solid technical resistance at $1,705.40. Bears’ next near-term downside price objective is closing prices below strong technical support at this week’s low of $1,535.00. First resistance is seen at Tuesday’s high of $1,679.20 and then at $1,705.40. First support is seen at the overnight low of $1,633.20 and then at Tuesday’s low of $1,616.80.
December silver futures prices closed near mid-range Tuesday. While serious near-term and longer-term chart damage has been inflicted recently, this week’s price action also suggests the bears became exhausted at Monday’s lower price levels as selling interest dried up at Monday’s low of $26.15 and prices rebounded strongly. Tuesday’s strong follow-through buying interest is a clue that a near-term market bottom is in place. However, at present silver prices are still in a six-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is producing a close above strong technical resistance at $35.00 an ounce. The next downside price breakout objective for the bears is closing prices below psychological support at $30.00. First resistance is seen at $32.00 and then at the overnight high of $32.88. Next support is seen at the overnight low of $30.715 and then at Tuesday’s low of $30.275.
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