Gold Ends Steady-Firm on Short Covering, But Slumping Crude Oil Limits Upside
San Francisco (Nov 13) Gold prices ended the U.S. day session steady to modestly higher Thursday. There was more tepid short covering by the shorter-term futures traders and some light bargain hunting in the cash market. However, sharply lower crude oil prices that hit a three-year low in Nymex futures and a four-year low in Brent futures Thursday limited buying interest in gold and silver. December Comex gold was last up $2.20 at $1,161.30 an ounce. Spot gold was last quoted down $0.40 at $1,161.75. December Comex silver last traded up $0.007 at $15.63 an ounce.
The World Gold Council reported Thursday that worldwide demand for gold dropped by 2% from the same reporting period last year. Chinese demand for gold jewelry dropped sharply in the third quarter, but demand from India rose sharply in the period. I’m going to repeat some sage advice given by Warren Buffet: “Be greedy when others are fearful and be fearful when others are greedy. Well, the gold market traders and investors are mostly in a fearful mood at present. Studying markets’ price history shows the present bust in gold will at some point turn into a value-buying opportunity—before the boom cycle begins. I’m not going too far out on a limb in forecasting gold prices will reach record highs in less than 10 years, and maybe in less than five.
China industrial production in October was reported at up 7.7% year-on-year, which is below the 8% rise that was expected. This latest economic data falls in line with Chinese economic reports that have mostly missed to the downside of expectations. While China’s economic readings are still the envy of major industrial countries, the robust growth seen in recent years is decelerating.
A European Central Bank survey showed that forecasters see this year’s European Union overall inflation rate at 0.5% and see 2015 inflation coming in at 1.0%. They see EU inflation in 2016 at 1.4%. All these figures are still well below the 2.0% inflation rate the ECB has targeted.
Reports Wednesday said a Russian military convoy was headed for the Russia-Ukraine border. Markets did not pay a whole lot of attention to that news. However, the Russia-Ukraine conflict could move from the back burner of the market place to the front burner in a hurry. Such would very likely be supportive for safe-have assets such as gold and U.S. Treasuries.
The London P.M. gold fix was $1,161.75 versus the previous London A.M. fixing of $1,161.00.
Technically, December gold futures prices closed near mid-range today. The gold bears still have the firm overall near-term technical advantage. A bearish pennant pattern has formed on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,179.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,130.40. First resistance is seen at today’s high of $1,167.40 and then at $1,172.50. First support is seen at today’s low of $1,153.00 and then at $1,150.00. Wyckoff’s Market Rating: 2.0
December silver futures prices closed near mid-range. The silver bears have the solid overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $16.22 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at this week’s high of $15.88 and then at $16.00. Next support is seen at this week’s low of $15.445 and then at $15.20. Wyckoff's Market Rating: 1.5.
December N.Y. copper closed down 370 points at 298.80 cents today. Prices closed nearer the session low today and scored a bearish “outside day” down on the daily bar chart. The bears have the near-term technical advantage and gained fresh downside momentum today. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the October high of 311.40 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the October low of 295.15 cents. First resistance is seen at 300.00 cents and then at 302.50 cents. First support is seen at today’s low of 298.25 cents and then at the November low of 296.40 cents. Wyckoff's Market Rating: 2.5
Source: KitcoNews
