(Kitco News) - Gold prices posted moderate gains Monday on an upside technical correction, some short-covering in the futures market and on some bottom-picking in the cash market. Gold prices last Friday set a 5.5-year low. The still-very-bearish technical postures for gold and silver will likely continue to keep the buyers timid. February Comex gold was last up $9.00 at $1,065.30 an ounce. March Comex silver was last up $0.032 at $14.08 an ounce.
The International Monetary Fund has just Monday added the Chinese yuan to its basket of official IMF reserve currencies. The move was expected and did not move the markets. However, it’s just one more development that shows the growing influence and power of China on the world stage.
There were no major, fresh, markets-moving geopolitical developments for the marketplace to focus upon Monday, which is the last trading day of the month. The start of the Christmas shopping season is getting attention, as Black Friday is being followed by Cyber Monday today.
As the calendar turns to December traders and investors will again start buzzing about the mid-month FOMC meeting, at which time most market watchers believe the Federal Reserve will make its first interest rate increase in nine years.
A report overnight said the raw commodity sector had one of its worst months in around 45 years in November, when examining the Goldman Sachs Commodity Index (GSCI). A major bearish element for the raw commodity sector in recent weeks has been a resurgent U.S. dollar index, which hit a seven-month high Monday. The other “outside market” sees Nymex crude oil prices near steady Monday on mild short covering after hitting a three-month low last week.
On tap later this week is an OPEC oil cartel meeting and the regular meeting of the European Central Bank. The important U.S. jobs report is due out Friday.
Technically, February gold futures prices closed nearer the session high on short covering after hitting a 5.5-year low last Friday. Gold prices are still in a steep six-week-old downtrend on the daily bar chart. Bears still have the solid near-term technical advantage and there are no early clues of a market bottom being close at hand. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,080.50. Bears' next near-term downside price breakout objective is pushing prices below solid longer-term technical support at 1,050.00. First resistance is seen at $1,070.00 and then at $1,075.00. First support is seen at last week’s contract low of $1,051.60 and then at $1,050.00. Wyckoff’s Market Rating: 1.5
March silver futures prices closed near mid-range on tepid short covering. The silver market bears have the solid overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $14.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $14.30 and then at $14.44. Next support is seen at today’s low of $13.975 and then at the contract low of $13.89. Wyckoff's Market Rating: 1.5.
March N.Y. copper closed down 60 points at 205.15 cents today. Prices closed nearer the session low. Copper bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 220.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 200.00 cents. First resistance is seen at today’s high of 208.40 cents and then at 210.00 cents. First support is seen at today’s low of 204.00 cents and then at the contract low of 200.20 cents. Wyckoff's Market Rating: 1.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
