(Kitco News) - Gold prices ended the U.S. day session higher and scored a nearly three-month high Tuesday. More safe-haven demand and technical buying were featured and bulls have near-term momentum on their side. The key “outside markets” were also in a bullish posture for the precious metals on this day, as crude oil prices were solidly higher and the U.S. dollar index was weaker. February Comex gold was last up $15.30 at $1,120.60 an ounce. March Comex silver was last up $0.281 at $14.535 an ounce.
Asian stock markets were mostly lower Tuesday, led by another rout in Chinese stock indexes. The Shanghai stock index fell over 6% on Tuesday and is now down 22% so far this year. Worries about the plunging value of the Chinese yuan and capital leaving the country are helping to fuel panic selling of equities in China, which in turn is leading to solid selling pressure in Asian equities markets. However, U.S. stock indexes were holding solid gains in early afternoon trading Tuesday. Still, the recent shaky stock markets worldwide have played right into the hands of the safe-haven gold market bulls.
The Federal Open Market Committee (FOMC) meeting begins Tuesday and ends Wednesday afternoon with a statement. While no change in U.S. interest rates is expected at this meeting, the statement issued after the meeting will be very closely scrutinized. Many market watchers agree the world economies and financial markets have become less stable since the last FOMC meeting in mid-December. There is now a growing consensus the Fed may not be able to raise interest rates again any time soon, and that’s also a bullish element for the precious metals markets.
There was a heavy slate of U.S. economic data released Tuesday, including the S&P/Case-Shiller home price index, the U.S. monthly house price index, the U.S. flash services PMI, the consumer confidence index, and the Richmond Fed business survey. However, none of this data moved the markets significantly.
Technically, February gold futures prices closed near the session high today and hit a nearly three-month high. While the gold bears still have the overall near-term technical advantage, prices are in a choppy five-week-old uptrend and the bulls have technical momentum on their side. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,150.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,092.50. First resistance is seen at today’s high of $1,120.70 and then at $1,125.00. First support is seen at today’s low of $1,107.20 and then at $1,100.00. Wyckoff’s Market Rating: 4.0
March silver futures prices closed nearer the session high and hit a six-week high today. The silver market bears still have the overall near-term technical advantage. However, today’s price action could be the beginning of a bullish upside “breakout” from the sideways trading action the past several weeks that could have been “basing” that would precede a market bottom being in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at today’s high of $14.58 and then at the December high of $14.64. Next support is seen at $14.425 and then at today’s low of $14.22. Wyckoff's Market Rating: 3.0.
March N.Y. copper closed up 400 points at 203.80 cents today. Prices closed nearer the session high on short covering. The key “outside markets” were bullish for copper today as the U.S. dollar index was weaker and crude oil prices were solidly higher. 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 215.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 193.55 cents. First resistance is seen at today’s high of 204.95 cents and then at 207.50 cents. First support is seen at 200.00 cents and then at today’s low of 198.10 cents. Wyckoff's Market Rating: 2.5.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
