Gold Firmer In Quiet Trade; New Fundamental Developments Awaited

(Kitco News) - Gold prices ended the U.S. day session modestly higher Tuesday. Short covering in the futures market and bargain hunting in the cash market were featured after prices last week hit a 10-month low. February Comex gold was last up $4.60 an ounce at $1,138.20. March Comex silver was last up $0.191 at $15.95 an ounce.

Gold prices did back down from earlier daily highs after some stronger-than-expected U.S. economic data was released. The consumer confidence index reading for December came in at 113.7 versus 109.4 in November. The December number was the highest in over 15 years. The Richmond Fed business survey also beat market expectations.

Global stock markets were mixed to firmer in quiet trading overnight. London markets remained closed Tuesday for the Christmas holiday. There were no major, markets-moving news events overnight, to begin this holiday-shortened trading week. Precious metals traders are looking for fresh fundamental inputs to drive market prices.

The key “outside markets” on Tuesday saw Nymex crude oil prices trade higher. Oil market watchers are waiting to see if OPEC and Russia oil producers can stick to their agreed-upon plan to reduce production. The plan goes into effect January 1. Nymex crude oil bulls have struggled a bit with prices trading above $50.00 a barrel. Meantime, the U.S. dollar index was slightly higher and trading not far below its 13-year high scored last. The strong greenback has been a bearish weight on the precious metals markets recently.

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Technically, February gold futures prices closed nearer the session low. The gold bears still have the solid overall near-term technical advantage. Prices are in a six-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 $1,168.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,100.00. First resistance is seen at today’s high of $1,151.70 and then at $1,160.00. First support is seen at today’s low of $1,132.80 and then at last week’s low of $1,124.30. Wyckoff's Market Rating: 2.0

March silver futures prices closed near mid-range on short covering today. The silver market bears have the solid overall near-term technical advantage. There are no early clues of a market bottom being close at hand. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.50. First resistance is seen at today’s high of $16.105 and then at last week’s high of $16.265. Next support is seen at last week’s low of $15.675 and then at $15.50. Wyckoff's Market Rating: 1.5.

March N.Y. copper closed up 375 points at 251.65 cents today. Prices closed nearer the session high and scored a bullish “outside day” up, after hitting a six-week low early on today. The copper bulls have the overall near-term technical advantage but have faded recently to still suggest a market top is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 228.00 cents. First resistance is seen at today’s high of 253.05 cents and then at last week’s high of 256.00 cents. First support is seen at $2.50 and then at 247.50 cents. Wyckoff's Market Rating: 6.0.

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