Gold Sees Corrective Bounce After Recent Selling Pressure

(Kitco News) - Gold prices ended the U.S. day session moderately higher Monday, on some perceived bargain-basement buying in the cash market and on short covering in the futures market. Prices Friday slumped to a 10-month low. The bears remain in firm overall near-term technical control of both gold and silver markets. February Comex gold was last up $12.60 an ounce at $1,193.60. March Comex silver was last up $0.116 at $16.67 an ounce.

Trading in gold and silver markets was fairly quiet today amid a lack of major news or reports coming out of Asia, Europe or the U.S.

Traders and investors worldwide are anxiously awaiting the marketplace highlight of the week: the OPEC oil cartel meeting on Wednesday. Some reckon OPEC may be able to come to a final agreement to cut production, as the cartel reported in September. However, others remain highly doubtful. Reports over the weekend said Iran and Russia now may not be willing to reduce their crude oil production levels. Global markets, including the precious metals, have been sensitive in recent weeks to the daily price movements in crude oil prices. Nymex crude oil futures prices were higher in afternoon U.S. trading Monday.

The other key "outside market" on Monday saw the U.S. dollar index slightly lower on a corrective pullback from recent strong gains that pushed the index to a 13-year high last week. The recent strong greenback has also been a major bearish element for the gold and silver markets.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Technically, February gold futures closed prices closed near mid-range on short covering after hitting a 10-month low Friday. The gold bears still have the solid overall near-term technical advantage. Prices are in a five-month-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,223.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,150.00. First resistance is seen at today’s high of $1,200.00 and then at $1,210.00. First support is seen at today’s low of $1,184.40 and then at last week’s low of $1,172.80. Wyckoff's Market Rating: 2.5

March silver futures prices closed near mid-range today on short covering after hitting a six-month low last Friday. The silver market bears have the solid overall near-term technical advantage. Prices are in a five-month-old downtrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $16.945 and then at $17.00. Next support is seen at today’s low of $16.53 and then at last week’s low of $16.245. Wyckoff's Market Rating: 2.5.

March N.Y. copper closed down 165 points at 266.50 cents today. Prices closed nearer the session low on profit taking after hitting a 17-month high earlier today. The copper bulls still have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at today’s high of 275.30 cents. The next downside price objective for the bears is closing prices below solid technical support at 250.00 cents. First resistance is seen at 270.00 cents and then at 274.40 cents. First support is seen at today’s low of 264.55 cents and then at 260.00 cents. Wyckoff's Market Rating: 7.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com