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Gold Up, at 2.5-Month High, as Outside Markets Bullish; Silver Sees Upside Technical Breakout......
Comex gold futures prices are trading solidly higher and have hit a fresh 2.5-month high in early U.S. trading Tuesday. The key outside markets are in a daily bullish posture for the precious metals Tuesday, as the U.S. dollar index is lower and crude oil prices are firmer. The gold bulls have 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 $15.80 at $1,638.80 an ounce. Spot gold was last quoted up $15.50 an ounce at $1,637.25. September Comex silver last traded up $0.592 at $29.18 an ounce.
In overnight news, European stocks were firmer 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.
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 U.S. dollar index is lower in early trading Tuesday as the greenback bulls are fading this week. The dollar index has seen choppy trading recently, but the bulls still maintain the overall near-term technical advantage. Meantime, crude oil prices are firmer Tuesday morning and hit another fresh three-month high overnight. 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 A.M. gold fix is $1,624.00 versus the previous London P.M. fixing of $1,615.00.
U.S. economic data due for release Tuesday is again light and includes the weekly Johnson Redbook and Goldman Sachs chain store sales reports.
Technically, December gold futures have seen choppy, sideways and range-bound trading action for the past two months. However, gold has now pushed up into the upper boundary of the trading range and are on the verge of producing a bullish upside “breakout” from that range. The gold market bulls have regained the 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 overnight high of $1,641.00 and then at $1,646.40. First support is seen at $1,629.70 and then at today’s low of $1,620.80.
September silver futures prices hit a fresh nine-week high overnight as the bulls this week have gained fresh upside technical momentum. This week’s price action appears to be the beginning of a bullish upside breakout from a sideways and choppy trading range on the daily bar chart. Silver bulls have regained the slight near-term technical advantage. 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 the August low of $26.88. First resistance is seen at today’s high of $29.27 and then at $29.50. Next support is seen at $29.00 and then at $28.79.
By Jim Wyckoff