Gold Slightly Up on Short Covering and Mild Safe-Haven Buying
New York (June 11) Gold prices ended the U.S. day session slightly higher Wednesday and hit a two-week high. More short covering and bargain hunting were featured, along with a bit of safe-haven demand. The gold bulls are also gaining some near-term technical momentum. August Comex gold was last up $1.00 at $1,261.10 an ounce. Spot gold was last quoted up $1.00 at $1,261.40. July Comex silver last traded up $0.027 at $19.195 an ounce.
A sell off in the U.S. stock market Wednesday was somewhat beneficial for the gold and silver markets. Escalating violence and instability in Iraq were also mentioned in the market place. Both of these elements provided some mild safe-haven demand for gold. But of the sell off in this very mature bull market run in stocks continues, and if the situation in Iraq deteriorates further, gold will see better safe-haven buying interest.
In overnight news, the World Bank cut its annual world economic growth forecast to 2.8% from its last forecast of up 3.2%, in January. This news was also bullish for the gold market as it hints the world’s major central banks can keep their easy-money policies in place at least a while longer.
A feature in the market place recently has been the sinking value of the Euro currency and the rising value of the U.S. dollar. Last week’s new monetary stimulus measures from the European Central Bank were a bearish underlying development for the Euro currency, as it hovers near a four-month low. Meantime, the U.S. dollar index is trading near a four-month high. This currency price action has historically been bearish for the raw commodity sector, including gold. However, the gold market has just recently rebounded from lower price levels and Nymex crude oil futures prices are at contract highs around $105.00 a barrel.
The London P.M. gold fix was $1,262.00 versus the previous A.M. fixing of $1,259.50.
Technically, August gold futures prices closed near mid-range and hit another two-week high Wednesday. Gold market bears still have the overall near-term technical advantage. However, the bulls are making a modest move. Prices are still in a three-month-old downtrend on the daily bar chart.
July silver futures prices closed nearer the session low and did hit another two-week high early on. Tepid short covering was featured. The silver bears still have the firm overall near-term technical advantage. However, the silver bulls are also making a modest move. Prices are still in a 3.5-month-old downtrend on the daily bar chart.
July N.Y. copper closed down 125 points at 304.05 cents Wednesday. Prices closed nearer the session low. Copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 312.50 cents.
Source: Kitco News
