P.M. Kitco Metals Roundup: Gold Surges To 7-Week High On Safe-Haven, Technical Buying

(Kitco News) - Comex gold futures prices ended the U.S. day session sharply higher, near the daily high and hit a fresh seven-week high Thursday. Safe-haven buying was featured amid the sell- off in the U.S. stock market and the escalation in violence in Egypt. Technical buying was also seen Thursday around midday when key chart resistance levels were penetrated on the upside, which trigger buy-stop orders. The U.S. dollar index also sold off sharply around midday, which also gave the gold bulls some fuel. The gold market bulls gained fresh upside near-term technical momentum on Thursday. December gold was last up $29.10 at $1,362.70 an ounce. Spot gold was last quoted up $26.80 at $1,363.75. September Comex silver last traded up $1.198 at $22.985 an ounce.
Reports Thursday said around 525 people have died the past two days in anti-government violence in Egypt. Government troops have reportedly shot citizens protesting in the streets. This news helped to support the safe-haven demand in the gold market. Egypt controls the Suez Canal, through which a good percentage of the world’s oil traffic and other commerce flow.
The gold market saw initial selling pressure in early U.S. trading Thursday. U.S. jobless claims in the latest reporting week fell by 15,000 workers. Meantime, the U.S. consumer price index came in at a tame rise of 0.2% in July, which was right in line with expectations. That jobless claims added fuel to the fire for those thinking the Federal Reserve will begin to “taper” its monthly bond-buying program, also known as quantitative easing, sooner rather than later, and possibly as soon as September.  The consumer price data suggests continued low inflationary price pressures and that was also not bullish for the gold or silver markets.
There was a batch of other U.S. economic data released Thursday that failed to significantly move the markets.  Also, St. Louis Fed president James Bullard spoke at a breakfast meeting Thursday morning. Bullard said nothing that significantly moved the markets.
The U.S. dollar index was solidly lower Thursday and sold off suddenly and mysteriously around midday. The greenback had been firmer Thursday morning following the bullish weekly jobless claims data. The dollar index bears have the overall near-term chart advantage. Nymex crude oil futures prices were firmer Thursday on the Egypt unrest. The crude oil bulls have the overall near-term technical advantage.
The London P.M. gold fix is $1,329.75 versus the previous P.M. fixing of $1,328.50.
Technically, December gold futures prices closed nearer the session high and hit a fresh nearly two-month high Thursday. Gold bears still have the overall near-term technical advantage, but the bulls made some good headway Thursday. Thursday’s price actions started a six-week-old uptrend that is now in place 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 $1,400.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at Thursday’s high of $1,367.90 and then at $1,375.00. First support is seen at $1,350.00 and then at $1,345.00. Wyckoff’s Market Rating: 4.0
September silver futures prices closed nearer the session high Thursday and hit a fresh nearly three-month high. Bulls have gained solid upside technical momentum the past week. Bulls have the near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $21.00. First resistance is seen at Thursday’s high of $23.19 and then at $23.50. Next support is seen at $22.75 and then at $22.50. Wyckoff's Market Rating: 6.0.
September N.Y. copper closed up 10 points at 334.10 cents today. Prices Thursday closed nearer the session high and closed at a fresh nine-week high close. Copper bulls have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 341.25 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 317.50 cents. First resistance is seen at this week’s high of 334.95 cents and then at 336.00 cents. First support is seen at 332.50 cents and then at 330.00 cents. Wyckoff's Market Rating: 6.0.
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By Jim Wyckoff