Gold Ends Modestly Up, Supported By Weaker U.S. Dollar Index

(Kitco News) – Comex gold futures prices ended a quieter U.S. day session with modest gains Wednesday. Some weak U.S. economic data pressured the greenback and in turn helped push gold prices a bit north. Traders and investors are more eagerly awaiting major monthly data when the European Central Bank holds its monthly meeting on Thursday, followed by Friday’s U.S. employment report. Gold trading remains choppy and sideways on the daily bar chart. Comex August gold last traded up $3.90 at $1,401.10 an ounce. Spot gold was last quoted up $1.60 at $1,402.00. July Comex silver last traded up $0.086 at $22.495 an ounce.

The gold market pushed to its daily high in morning trading Wednesday when the U.S. ADP national employment report showed a weaker jobs-growth reading than the market place expected. The U.S. dollar index fell to its daily low following that report.

The afternoon release of the Federal Reserve’s beige book contained no surprises and the market place reacted little to the results.

In overnight news, the Japanese stock market tumbled again and the yen rallied against the U.S. dollar as the latest Japanese government economic stimulus measure was not well embraced by traders and investors. The Nikkei stock index is now down by 18% since late May. The sell-off in Japan equities spilled over into weakness in other Asian stock markets Wednesday.

Euro zone economic data released Wednesday continued to show weakness, which put downside pressure on the Euro currency. Retail sales fell by 0.5% in April and were down 1.1% year-on-year. The Markit data company reported its reading on manufacturing and service sectors was 47.7 in May from 46.9 in April. Any reading below 50.0 signals contraction.

The London P.M. gold fixing is $1,404.00 versus the previous P.M. fixing of $1,399.50.

Technically, August gold futures prices closed nearer the session low Wednesday in quieter trading. Trading has been choppy. The gold bears still have the overall near-term technical advantage. Prices are in an eight-month-old downtrend on the daily bar chart. However, more gains in the near term would produce a bullish double-bottom reversal pattern 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 $1,421.60. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,372.80. First resistance is seen at Wednesday’s high of $1,410.30 and then at this week’s high of $1,416.50 and then at last week’s high of $1,421.60. First support is seen at Wednesday’s low of $1,395.10 and then at this week’s low of $1,388.10. Wyckoff’s Market Rating: 3.0

July silver futures prices closed near mid-range Wednesday. Silver bears still have the overall near-term technical advantage. Prices are in an eight-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $23.29 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $22.00. First resistance is seen at Wednesday’s high of $22.74 and then at this week’s high of $22.915. Next support is seen at this week’s low of $22.175 and then at $22.00. Wyckoff’s Market Rating: 3.0.

July N.Y. copper closed up 15 points at 337.05 cents Wednesday. Prices closed near mid-range. Copper bulls and bears are on a level near-term technical playing field. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 341.80 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 322.40 cents. First resistance is seen at Wednesday’s high of 339.80 cents and then at 341.00 cents. First support is seen at Wednesday’s low of 334.90 cents and then at 332.20 cents. Wyckoff’s Market Rating: 5.0.

By Jim Wyckoff, contributing to Kitco News

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The Art&Science of Trading Gold
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