Comex gold futures closed the U.S. day session solidly lower and near the session low Wednesday. It was a “risk off” day in the market place Wednesday as most raw commodity markets, including the precious metals, were under selling pressure, led by crude oil. The other key “outside market” beside crude oil pressuring gold and silver Wednesday was a firmer U.S. dollar index. April gold last traded down $27.20 at $1,657.50 an ounce. Spot gold was last quoted down $22.80 an ounce at $1,658.25. May Comex silver last traded down $0.691 at $31.925 an ounce.
Also helping to pressure the yellow metal recently has been less physical demand for gold due to a sellers’ strike in India. Jewelry and metals dealers in that nation are protesting the Indian government’s doubling of a sales tax on gold by simply taking their products off the market.
The U.S. dollar index traded firmer Wednesday on some short covering and amid the “risk-off” day in the market place. However, the index Tuesday hit a fresh four-week low and the greenback bulls are still on shaky technical ground. Meantime, crude oil prices dropped sharply Wednesday on a bearish U.S. stocks report and on reports the International Energy Agency may soon announce a coordinated tapping of nations’ strategic petroleum reserves.
The European Sovereign debt crisis is creeping back into the financial news this week, but is not quite a front-burner issue for the market place. The present posture of the market place appears to be that the worst of the EU debt crisis may be past. Still, any significant heating up of the EU debt crisis would likely support buying interest in safe-haven gold.
The London P.M. gold fixing was $1,676.00 versus the previous P.M. fixing of $1,692.00.
Technically, April gold futures prices closed nearer the session low Wednesday. Bulls faded Wednesday and the bears now have the slight near-term technical advantage. 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 solid technical support at last week’s low of $1,627.50. First resistance is seen at $1,670.00 and then at Wednesday’s high of $1,684.50. First support is seen at Wednesday’s low of $1,654.00 and then at $1,650.00. Wyckoff’s Market Rating: 4.5.
May silver futures prices closed nearer the session low Wednesday. Silver bears have the near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $33.19 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $31.09. First resistance is seen at $32.00 and then at $32.50. Next support is seen at Wednesday’s low of $31.765 and then at $31.50. Wyckoff’s Market Rating: 4.0.
May N.Y. copper closed down 840 points 379.60 cents Wednesday. Prices closed nearer the session low. The key “outside markets” were bearish for gold Wednesday, as the U.S. dollar index was firmer and crude oil prices were sharply lower. Copper bulls still have the slight overall near-term technical advantage. However, prices have been trading sideways for six weeks. 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 last week’s low of 375.25 cents. First resistance is seen at 382.50 cents and then at 385.00 cents. First support is seen at Wednesday’s low of 378.25 cents and then at last week’s low of 375.25 cents. Wyckoff’s Market Rating: 5.5.
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By Jim Wyckoff, contributing to Kitco News; email@example.com