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P.M. Kitco Metals Roundup: Gold Ends Solidly Higher, on Verge of Bullish Upside Technical Breakout
by Kitco News | Tuesday August 21, 2012 2:03 PM

Comex gold futures prices ended the U.S. day session with good gains and hit a fresh 2.5-month high Tuesday. It was a “risk-on” day in the market place Tuesday, as most commodity futures markets saw buying interest sparked by the key outside markets being in a daily bullish posture--the U.S. dollar index was solidly lower and crude oil prices were higher. The gold bulls gained fresh upside near-term technical momentum Tuesday. Meantime, the silver market bulls this week have also gained good technical strength. December gold last traded up $18.60 at $1,641.50 an ounce. Spot gold was last quoted up $18.30 an ounce at $1,640.00. September Comex silver last traded up $0.842 at $29.435 an ounce.

The precious metals also got some underlying support from overnight news. European stocks were firmer Tuesday as a Spanish treasury bill auction was deemed successful. European investors presently are more confident the European Central Bank will be more aggressive in dealing with and aiding the financially troubled EU countries going forward. However, I look for the EU debt crisis to move back to the front burner of the market place in September. Such could spark fresh safe-haven demand for gold. Moves by China’s central bank to inject more liquidity into its banking system Tuesday were also seen as bullish for gold and silver, as well as other raw commodity markets.

Traders and investors are looking forward to the Jackson Hole, Wyoming U.S. Federal Reserve confab next week, and the mid-September FOMC meeting. Many raw commodity and stock market bulls are hoping the Fed will soon announce a fresh quantitative easing of monetary policy--nicknamed QE3. The minutes of the last FOMC meeting are due out Wednesday.

Reports overnight said India’s festive season gold imports this year will likely be half of last year’s rate, at 200 to 250 tons for 2012. Reasons for the slack demand include perceived high gold prices and a poor monsoon season depressing consumer demand. The market place shrugged off that potentially bearish news, as traders reckoned the slip in Asian physical gold demand is not fresh news and had already been factored into prices.

The U.S. dollar index was solidly lower Tuesday and hit a fresh four-week low. The greenback bulls are fading and a downtrend line is in place on the daily bar chart. Meantime, crude oil prices were higher Tuesday and hit another fresh three-month high. Oil bulls have upside near-term technical momentum. The precious metals markets will continue to look closely at how these two key “outside markets” trade on a daily basis.

The London P.M. gold fix is $1,639.50 versus the previous London P.M. fixing of $1,615.00.

Technically, December gold futures prices closed near the session high Tuesday and hit a fresh 2.5-month high. Bulls gained fresh upside technical momentum as prices are now on the verge of a bullish upside “breakout” from the choppy and sideways trading range that has been in place on the daily chart for nearly three months. The gold market bulls Tuesday also regained the slight overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,646.40. Bears' next near-term downside price objective is closing prices below solid technical support at the August low of $1,586.30. First resistance is seen at the June high of $1,646.40 and then at $1,650.00. First support is seen at $1,633.30 and then at $1,625.00. Wyckoff’s Market Rating: 5.5

September silver futures prices closed near the session high again Tuesday and hit a fresh 2.5-month high. This week’s price action in silver has produced a big and bullish upside breakout from a sideways and choppy trading range that had been in place on the daily bar chart. Silver bulls have gained the overall near-term technical advantage and have fresh upside momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the June high of $29.915 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $27.50. First resistance is seen at $29.50 and then at $29.915. Next support is seen at $29.00 and then at Tuesday’s low of $28.61. Wyckoff's Market Rating: 6.0.

September N.Y. copper closed up 760 points at 344.75 cents Tuesday. Prices closed nearer the session high on short covering and bargain hunting. It was a “risk-on” day in the market place today as the key outside markets were bullish for copper—the U.S. dollar index was solidly lower and crude oil prices were higher. Copper bulls and bears are now back 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 July high of 355.65 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 328.85 cents. First resistance is seen at Tuesday’s high of 346.65 cents and then at 350.00 cents. First support is seen at 340.00 cents and then at Tuesday’s low of 337.00 cents. Wyckoff's Market Rating: 5.0.


P.M. Kitco Metals Roundup: Gold Ends Solidly Higher, on Verge of Bullish Upside Technical Breakout
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