Gold Futures Hit 6-Week High... Comex Gold Futures Hit 6-Week High on Safe-Haven Buying Interest, Bullish Technical Momentum
16 August 2010, 8:35 a.m.
By Jim Wyckoff
Of Kitco News
www.kitco.com
Comexgold futures prices are trading higher and hit a fresh six-week highMonday, boosted by some weak Japanese economic data overnight and by alower U.S. dollar index. Gold prices have been trending higher forthree weeks as upside technical momentum is building. December goldlast traded up $7.80 an ounce at $1,224.40. Spot gold was last quotedup $7.20 at $1,223.00.
Reports overnight showed Japanesegross domestic product slowed dramatically in the latest reportingperiod. When combined with recent weak economic data coming out ofChina and the U.S, the three largest economies in the world are stillsputtering. This has caused investors to become more risk averse, whichhas in turn prompted safe-haven buying interest in the gold market thepast few weeks.
A weaker U.S. dollar index is also givinga boost to the gold market Monday morning. However, the gold market hasrecently become more de-coupled from an inverse trading relationshipwith the U.S. dollar index. Last week gold and the dollar index bothposted gains as both are considered safe-haven assets during times ofheightened investor uncertainty. If the world stock markets continue toshow weakness in the near term, look for gold and the U.S. dollar indexto continue to track higher.
Some gold market analystsare now saying that with gold prices pushing well above the$1,200.00-an-ounce level recently, physical demand from Asia coulddecrease at the higher price levels.
The London A.M. gold fix was $1,222.00 versus the previous P.M. fixing of $1,214.25.
Technically,the gold market bulls have solid near-term upside technical momentumand have gained some more strength Monday when December Comex priceshit a fresh six-week high. Prices are in a three-week-old uptrend onthe daily bar chart as prices have now pushed well above thepsychologically and technically important $1,200.00-an-ounce level.
Thenext upside price objective for the gold market bulls is to push andclose December futures prices above solid chart resistance at$1,250.00. The bears' next downside price objective is producing aclose in December gold futures below solid chart support at $1,200.00.
ForDecember gold, shorter-term technical resistance is located at$1,230.00 and then at $1,240.00. Buy stops likely reside just abovethose levels. Sell stops likely reside just below chart support at theovernight low of $1,216.20 and then at $1,210.00. Today's key near-termFibonacci pivot level for December gold: $1,228.00.
Comexsilver futures are firmer Monday morning. December silver last tradedup 12.0 cents at $18.285 an ounce. Silver bulls and bears arepresently on a level near-term technical playing field as trading hasbeen choppy recently.
The next near-term upside priceobjective for the silver market bulls is to push and close DecemberComex futures prices above solid chart resistance at the August high of$18.75 an ounce. The next downside price objective for the silver bearsis to push and close December silver prices below solid technicalsupport at last week's low of $17.855.
December silverfinds shorter-term technical resistance at the overnight high of $18.37and then at $18.50. Buy stops likely reside just above those levels.Shorter-term technical support for December silver is located at theovernight low of $18.16 and then at $18.00. Sell stops are likelyplaced just below those levels. Today's key Fibonacci pivot level forDecember silver futures is located at $18.24.