(Kitco News) - Comex gold futures prices ended the U.S. day session sharply lower, near the daily low and careened to a fresh two-month low Wednesday. The precious yellow metal saw strong follow-through selling pressure from Tuesday afternoon’s downdraft that was prompted by an upbeat FOMC statement and by news J.P. Morgan declared a dividend after a successful stress test result. Fresh, significant near-term technical damage has been inflicted on the gold and silver charts. April gold last traded down $56.60 at $1,637.60 an ounce. Spot gold was last quoted down $15.10 an ounce at $1,660.50. May Comex silver last traded down $1.931 at $31.68 an ounce.
(NOTE: I am doing a free educational webinar for Kitco Thursday at midday. It will be a tutorial on how basic technical analysis can improve upon your trading/investment methods. As with all my work, the webinar will be in “plain English” and easy to understand for all market watchers.—Jim)
The safe-haven gold market has taken a big hit following the Tuesday afternoon release of the statement following the latest meeting of the Federal Open Market Committee. The Fed acknowledged an improving U.S. economy with still-low inflation expectations. The statement further squelched talk the Fed will implement another round of what would likely be commodity-market-bullish quantitative easing. The precious metals got a second punch Tuesday afternoon when J.P. Morgan announced it had passed the government’s stress testing and was declaring a dividend as well as paying back a big chunk of government loans. Investor risk appetite has up-ticked significantly following Tuesday afternoon’s developments, which has hurt gold and also the safe-haven U.S. Treasury market.
The U.S. dollar index traded higher Wednesday and hit a fresh seven-week high. That was also bearish for the precious metals markets Wednesday. The dollar index bulls have gained fresh upside near-term technical momentum recently. Meantime, the crude oil market was weaker Wednesday, which was a slight negative for the metals. Crude oil and the dollar index will continue to be key “outside market” forces impacting the precious metals prices on a daily basis.
The European Union sovereign debt crisis has eased recently, which is also allowing investor risk appetite to grow. The Greek private sector/government debt swap arrangement was endorsed by EU politicians on Monday. There has also been positive German economic news out this week. EU government bond yields have also pulled back a bit recently. However, now that the latest Greek hurdle has been cleared the market place attention will soon turn to other EU trouble spots, such as Portugal and/or Spain. The overall EU debt crisis remains a major underlying bullish factor for safe-haven gold.
The London P.M. gold fixing was $1,644.25 versus the previous P.M. fixing of $1,690.00.
Technically, April gold futures prices closed near the session low Wednesday and dropped to a fresh two-month low as fresh chart damage was inflicted. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,700.00. Bears' next near-term downside price objective is closing prices below psychological support at $1,600.00. First resistance is seen at $1,650.00 and then at 1,675.00. First support is seen at today’s low of $1,635.80 and then at $1,625.00. Wyckoff's Market Rating: 4.0.
May silver futures prices closed near the session low Wednesday and hit a fresh seven-week low. Significant near-term chart damage was inflicted in silver Wednesday. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $34.41 an ounce. The next downside price breakout objective for the bears is closing prices below major psychological support at $30.00. First resistance is seen at $32.00 and then at $32.49. Next support is seen at today’s low of $31.625 and then at $31.50. Wyckoff's Market Rating: 4.0.
May N.Y. copper closed down 625 points 384.00 cents Wednesday. Prices closed near the session low. The key “outside markets” were bearish for the copper market Wednesday as the U.S. dollar index was higher and crude oil prices were weaker. Copper bulls still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of 370.25 cents. First resistance is seen at 387.75 cents and then at 390.00 cents. First support is seen at this week’s low of 381.70 cents and then at 380.00 cents. Wyckoff's Market Rating: 5.5.
Source; http://www.kitco.com/reports/KitcoNews20120314JW_pm.html
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