FS: US GOLD – Comex edges higher but resistance could limit gains
New York 08/01/2013 – Gold futures face stiff technical resistance on the approach to $1,660 an ounce and it could require some some progress in the US debt ceiling talks or better-then-expected data reads for for yellow-metal to move much higher, market participants said.
Gold for February delivery on the Comex division of the New York Mercantile Exchange was last up $10.20 at $1,656.50 an ounce. Trade has ranged from $1,646.80 to $1,657.50.
“We expect selling into rallies to persist for the time being. The 200-day moving average for gold at $1,661 remains the major resistance level,” Standard Bank said in a note.
In gold specific data, China imported 90.7 tonnes of gold from Hong Kong in November, nearly double the 47.5 tonnes the previous month, according to customs data.
“The stronger month-on-month number should not come as a complete surprise – gold averaged lower during November which, combined with higher seasonal demand would have pushed demand up (gold averaged $1,722 in November compared to an average price of $1,744 in October),” Standard Bank noted.
George Gero, RBC Capital Markets strategist, suggested that $1,650 seems to be a new holding pattern for now. It would take a close over $1,685 to restore the upward trend.
“So far the auto sales figures have been encouraging but the continued [US] budget drama is presently keeping large buyers on sidelines,” Gero said.
Comex silver for March delivery was last 27.3 cents higher at $30.355 an ounce. Trade has ranged from $30.085 to $30.430.
“March silver seems to have found some measure of support off an extending consolidation pattern on the charts with a rather extensive series of lows seen just below the $30.00 level,” Standard Bank said in a note.
“Some traders are suggesting that silver is outperforming the gold market this week, while others think that the $30.00 level on the charts has become a critical pivot point of sorts,” CME added.
Meanwhile, platinum and palladium are expected to hold up better than gold, Standard Bank said.
“As pointed out before, we do not believe that from a risk/return perspective it is worth being short platinum below $1,550,” Standard Bank added. “This view is based on cost-of-production economics.”
Platinum futures for April delivery on the Nymex were last up $11.10 at $1,567.40 an ounce, while the March palladium contract was at $673.60 an ounce, up $3.60.
In the wider-markets, the euro was last about a half cent weaker at 1.3075 against the dollar, while Germany’s DAX and France’s CAC-40 were up 0.04 percent and 0.57 percent respectively.
As for the more industrial commodities, light sweet crude (WTI) oil futures for February delivery on the Nymex were up 29 cents at $93.48 per barrel and the most-actively traded Comex copper contract was at $3.6815 per pound, up 0.35 cents.
On the data side, trade balance numbers out of Germany came in below expectations at 14.6 billion euros – the surplus has been falling for four months – but the deficit in France was not as bad as expected at 4.3 billion euros.
The Italian unemployment rate beat the expected 11.2 percent at 11.1 percent, while unemployment data for the eurozone was as expected at 11.8 percent. Retail sales, however, disappointed at 0.1 percent.
