(Kitco News) - Gold prices at mid-morning moved up from moderate overnight losses to trade modestly higher, where they ended the U.S. day session. Some short covering and perceived bargain hunting were featured following the selling pressure seen earlier this week. The U.S. dollar index backed down from its daily high and crude oil prices were firmer today, which also encouraged some buying interest in the gold and silver markets. The gold bulls needed to step up and show some strength, in order to keep the chart-based sellers from gaining confidence and stepping into the market on the short side. February gold was last up $3.00 at $1,088.50 an ounce. March Comex silver was last up $0.414 at $14.165 an ounce.
There is an increased “risk-on” trader and investor attitude in the marketplace at mid-week, following some slightly upbeat trade data coming out of China Wednesday. China’s exports were up a better-than-expected 2.3% in December, year-on-year, after dropping by 3.7% in November. Those figures were in Chinese yuan terms. In U.S. dollar terms the data was not as positive.
Stock markets in Asia and Europe were mostly higher Wednesday, continuing a rebound that began Tuesday. U.S. stock indexes started out on the plus side Wednesday, but prices faded as the day wore on. That was also a bullish for safe-haven gold.
Crude oil prices were modestly higher in afternoon trading on tepid short covering and bargain hunting after prices hit a 12-year low and Nymex futures fell below $30.00 a barrel on Tuesday. A bearish weekly U.S. DOE liquid energy stocks report Wednesday did knock crude oil prices well down from their session high. The extreme bearish attitudes for crude oil suggest prices are near the bottom in this major bear market. Remember that markets are the most very bearish at the very bottom in price. Still, the slumping crude oil market has cast a bearish pall over most raw commodity markets as well as world stock markets.
An international incident was avoided Wednesday as Iran released 10 U.S. sailors who strayed into Iranian waters and were captured on Tuesday.
Technically, February gold futures prices closed nearer the session high on short covering and bargain hunting after recent selling pressure. The gold bears still have the overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,113.10. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,070.00. First resistance is seen at today’s high of $1,092.80 and then at $1,100.00. First support is seen at today’s low of $1,079.40 and then at $1,070.00. Wyckoff’s Market Rating: 3.0
March silver futures prices closed nearer the session high today on heavy short covering. The silver market bears still the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $14.425 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 today’s high of $14.205 and then at the January high of $14.38. Next support is seen at $14.00 and then at this week’s low of $13.73. Wyckoff's Market Rating: 2.5.
March N.Y. copper closed down 15 points at 195.75 cents today. Prices closed nearer the session low and closed at a contract and six-year low close today. The copper bears have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 205.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 190.00 cents. First resistance is seen at today’s high of 198.00 cents and then at 200.00 cents. First support is seen at Tuesday’s contract low of 195.25 cents and then at 192.50 cents. Wyckoff's Market Rating: 1.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
