Gold Higher On Short Covering, Bargain Hunting, Weaker U.S. Dollar
New York (Nov 18) Gold prices ended the U.S. day session higher and notched a three-week high Tuesday. Prices pushed above $1,200.00 in overnight dealings. More short covering and bargain hunting were featured, with a weaker U.S. dollar index on this day also providing support to the precious metals. February Comex gold was last up $13.80 at $1,197.90 an ounce. Spot gold was last up $10.70 at $1,198.40. March Comex silver last traded up $0.127 at $16.235 an ounce.
Gold prices also benefitted from news India’s gold exports are increasing and hit the highest level in over a year in October. However, reports Tuesday also said the Indian government could soon announce a plan to reduce gold imports in order to improve the trade deficit.
In overnight news, European stock markets and the Euro currency rallied due in part to an upbeat German ZEW economic expectations index for November that handily beat market expectations. The index was forecast to come in at 0.9 but posted a reading of 11.5. In October the ZEW index came in at -3.6. European equities also saw buying support after European Central Bank chief Mario Draghi reiterated on Monday that the ECB could purchase EU government bonds (quantitative easing), if necessary.
In Japan, Prime Minister Abe called for snap elections as he announced a delay in a sales tax increase measure by 18 months. It was reported Monday that Japan’s economy has slipped into recession following a third-quarter GDP report that showed contraction in Japan’s economy. The Japanese stock market was lifted on the Abe news.
The other key “outside market” saw January Nymex WTI crude oil prices lower Tuesday and still hovering near the recent three-year low. It’s going to be tough for all raw commodity markets to sustain a decent rally when crude oil prices are in a major bear market.
U.S. economic data released Tuesday included the producer price index, Treasury international capital data, and the NAHB housing market index. The PPI came in hotter than expected but the market place paid little attention to it.
The London P.M. gold fix was $1,192.75 versus the previous London A.M. fixing of $1,202.00.
Technically, February gold futures prices closed near mid-range. Recent upside price action hints a near-term market bottom is in place. The gold bears still have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,225.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,160.00. First resistance is seen at today’s high of $1,204.70 and then at $1,210.00. First support is seen at $1,190.00 and then at today’s low of $1,183.70. Wyckoff’s Market Rating: 3.0
March silver futures prices closed near mid-range on mild short covering. The silver bears still have the 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 $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $15.085. First resistance is seen at this week’s high of $16.50 and then at $16.715. Next support is seen at $16.00 and then at $15.75. Wyckoff's Market Rating: 2.5.
March N.Y. copper closed down 395 points at 299.20 cents today. Prices closed nearer the session low today. The bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the October high of 310.35 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the October low of 295.00 cents. First resistance is seen at 300.00 cents and then at 302.00 cents. First support is seen at today’s low of 298.65 cents and then at last week’s low of 297.70 cents. Wyckoff's Market Rating: 2.0.
Source: KitcoNews
