(Kitco News) - Gold prices ended the U.S. day session modestly higher Tuesday. Some more safe-haven buying and short covering in the futures market were featured, following decent gains posted Monday. Unrest in the Middle East and weak Chinese economic data released Monday have worked in favor of the yellow metal early this week. February Comex gold was last up $2.90 at $1,078.10 an ounce. March Comex silver was last up $0.154 at $13.995 an ounce.
There was still some anxiety in the marketplace Tuesday, but not as much as Monday. China’s central bank on Tuesday injected 130 billion yuan in short-term funds into its banking system and also intervened in the foreign exchange market to support the yuan. This helped to somewhat stabilize Asian stock markets following Monday’s strong selling pressure. Still, Chinese and world stock indexes were feeling a bit more selling pressure Tuesday. U.S. stock indexes were also lower in afternoon trading Tuesday.
What has been a surprising development this week is the inability of crude oil prices to rally in the face of significantly heightened tensions in the Middle East. In recent years, such developments would have quickly popped the price of crude oil by at least several dollars a barrel. However, this week the worries about a worldwide oil glut and slowing worldwide economic growth (meaning less demand for oil) are trumping the Middle East friction to keep oil prices from rallying. It’s somewhat ironical that crude oil prices seeing some selling pressure Monday also helped to pressure the U.S. stock market.
In other overnight news, inflation in the Euro zone remains stubbornly low. The European Union statistics agency on Tuesday reported consumer prices in December were up 0.2%, year-on-year. A rise of 0.3% was forecast. The European Central Bank wants to see an annual inflation rate of 2.0%.
Technically, February gold futures prices closed nearer the session high again today. There is the potential for a bullish double-bottom reversal pattern to play out on the daily bar chart. However, bulls will need to show more price strength this week to suggest the pattern to be an early clue that a market bottom is in place. Right now the gold bears still have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the December high of $1,088.30. Bears' next near-term downside price breakout objective is pushing prices below solid longer-term technical support at the contract low of 1,045.40. First resistance is seen at Monday’s high of $1,083.00 and then at $1,088.30. First support is seen at today’s low of $1,071.90 and then at Monday’s low of $1,061.00. Wyckoff’s Market Rating: 2.5
March silver futures prices closed nearer the session high on short covering. The silver market bears still have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $14.64 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the contract low of $13.64. First resistance is seen at Monday’s high of $14.185 and then at $14.42. Next support is seen at today’s low of $13.845 and then at last week’s low of $13.75. Wyckoff's Market Rating: 2.0.
March N.Y. copper closed up 145 points at 209.40 cents today. Prices closed near mid-range on short covering. The copper bears still have the firm overall near-term technical advantage. 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 211.15 cents and then at Monday’s high of 213.95 cents. First support is seen at Monday’s low of 206.90 cents and then at 203.40 cents. Wyckoff's Market Rating: 2.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
