Tuesday March 24, 2015 2:13 PM
(Kitco News) - Gold prices ended the U.S. day session modestly higher and hit a 2.5-week high Tuesday. A weakening of the U.S. dollar index recently has worked in favor of the precious metals bulls, although the dollar index posted slight gains Tuesday. Gold and silver market bulls have gained some technical momentum to suggest near-term lows are in place. April Comex gold was last up $5.10 at $1,192.80 an ounce. May Comex silver was last up $0.049 at $16.94 an ounce.
Gold prices did downtick following the U.S. consumer price index report that came in just a bit hotter than expected Tuesday. That gave the U.S. dollar index a boost prompted scattered ideas that the Fed could move to raise interest rates sooner. The February CPI was up 0.2% from January versus pre-report expectations for a reading of up 0.1%. The core CPI index was up 1.7%, year-on-year. However, overall, the CPI data is not real worrisome to inflation hawks and gold prices worked back higher during the trading session.
There was a German jet airliner that crashed in the French Alps and killed 150 people, with no survivors, reports said. Early indications have not given a cause of the crash and terrorism is not being ruled out. The market place will watch this situation very closely the next 24 hours. Reports Tuesday afternoon said the plane’s data recorder has been found.
There was a downbeat economic report coming out of China Tuesday. The preliminary HSBC China manufacturing purchasing managers’ index (PMI) had a reading of 49.2 in March versus 50.7 in February. The March number is an 11-month low. A number below 50.0 suggests contraction in the sector. Since China is a major raw commodity importer, this news is a bearish underlying factor for the raw commodity sector.
Meantime, the European Union reported an upbeat PMI number. The Markit PMI came in at 54.1 in March versus 53.3 in February. The new orders segment of that report showed the largest rise in four years. This news helped the Euro currency continue its rebound versus the U.S. dollar.
The key “outside markets” on Tuesday found the U.S. dollar index lower early on and then a mild rally occurred after the CPI report. Still, the dollar index bulls have faded recently and there are early technical clues of a topping process in the index. The weaker greenback is a bullish underlying factor for the raw commodity sector. In fact, price action in many commodity futures markets on Monday gave the bulls some hope that those markets were at or near price bottoms. Meantime, Nymex crude oil futures were firmer Tuesday but prices continue to hover not far above the six-year low scored last week. Prices are still below $50.00 a barrel. The strong bear market in crude oil remains a major negative for the raw commodity sector.
The London P.M. gold fixing is $1,191.50 versus the previous A.M. fixing of $1,193.25.
Technically, April gold futures prices closed nearer the session high and hit a 2.5-week high today. Bulls have technical momentum to suggest a near-term market low is in place. Bears do still have the overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,168.00. First resistance is seen at today’s high of $1,194.50 and then at $1,200.00. First support is seen at today’s low of $1,184.70 and then at this week’s low of $1,178.60. Wyckoff’s Market Rating: 3.5
May silver futures prices closed nearer the session high and closed at a six-week high close today. Recent upside price action in silver also gives the bulls technical momentum and suggests a near-term low is in place. Bears do still have the slight near-term technical advantage. 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 $16.25. First resistance is seen at this week’s high of $17.09 and then at $17.25. Next support is seen at today’s low of $16.805 and then at this week’s low of $16.61. Wyckoff's Market Rating: 4.0.
May N.Y. copper closed down 75 points at 279.70 cents today. Prices closed nearer the session low on a corrective pullback from recent solid gains. The copper market bulls have the overall near-term technical advantage. Prices Monday hit a 13-week high. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 295.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 265.00 cents. First resistance is seen at 285.00 cents and then at today’s high of 288.75 cents. First support is seen at Monday’s low of 275.50 cents and then at 271.80 cents. Wyckoff's Market Rating: 6.0.
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