Gold Price Solidly Up, Hits 4-Week High, on Bullish Fundamentals
San Francisco (Jun 18) Gold prices ended the U.S. day session solidly higher, pushed above the key $1,200.00 mark and hit a four-week high Thursday. The yellow metal was boosted by bullish remarks from the Federal Reserve chair on Wednesday afternoon and on safe-haven demand due to Greece debt worries. Short covering and fresh speculative buying were also featured. August Comex gold was last up $24.50 at $1,201.40 an ounce. July Comex silver was last up $0.218 at $16.16 an ounce.
Some markets, including gold, saw a somewhat delayed reaction to the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting Wednesday afternoon and the following press conference from Fed Chair Janet Yellen. While the Fed did not raise U.S. interest rates at this meeting and said the U.S. economy continues to improve, Yellen did signal in her press briefing that the Fed will remain “highly accommodative” even when it does raise interest rates—likely later this year. The market place took her remarks to fall squarely in the monetary policy doves’ camp. U.S. stock indexes rallied, U.S. Treasury prices got a lift, the U.S. dollar index sold off and gold prices were boosted.
European stock markets were pressured again Thursday amid increasing worries about Greece defaulting on its debt obligations to the European Union and International Monetary Fund. Greece-EU debt negotiations broke down last Sunday. Greece’s central bank on Wednesday warned of an “uncontrollable crisis” if the debt talks ultimately fail. Greek government officials will meet directly with EU officials Thursday to try to hammer out a last-minute deal. German Chancellor Merkel said Thursday a deal is still possible. However, most market watchers think otherwise at this late stage of the game. Greek protesters were seen gathering in the streets of Athens Thursday. This situation is prompting increased demand for safe-haven gold.
Asian stock markets sold off Thursday on heightened worries of a stock market bubble in China. Those notions also led to some buying of gold.
The London P.M. gold fix is $1,201.85 versus the previous A.M. fix of $1,198.00.
Technically, August gold futures bears still have the overall near-term technical advantage. However, a four-week-old downtrend on the daily bar chart was negated today and prices saw a bullish upside “breakout” from the recent sideways and choppy trading range. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,232.80. Bears' next near-term downside price breakout objective is closing prices below solid technical support at this week’s low of $1,171.90. First resistance is seen at Thursday’s high of $1,205.70 and then at $1,210.00. First support is seen at $1,191.80 and then at Thursday’s low of $1,183.10. Wyckoff’s Market Rating: 4.0
July silver futures bears have the near-term technical advantage. Prices did hit a two-week high Thursday. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.80 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $15.595. First resistance is seen at Thursday’s high of $16.43 and then at $16.50. Next support is seen at $16.00 and then at last week’s low of $15.77. Wyckoff's Market Rating: 3.0.
Source: KitcoNews
