P.M. Kitco Metals Roundup: Gold Hits 2-Week High On Safe-Haven Demand, Technical Buying

(Kitco News) - Comex gold futures prices ended the U.S. day session solidly higher and hit a two-week high Thursday. The market was boosted on safe-haven demand and more short covering. As gold prices moved above the key $1,400.00 level Thursday there was also fresh technical buying that surfaced. The lower U.S. dollar index also supported the precious metals markets Thursday. Comex August gold last traded up $22.50 at $1,414.30 an ounce. Spot gold was last quoted up $21.30 at $1,414.50.  July Comex silver last traded up $0.0277 at $22.73 an ounce.

Gold saw safe-have demand develop in overnight trading in Asia and Europe. Asian stock markets were sharply lower, with Japan’s Nikkei stock index down 5% Thursday and down nearly 15% in a week. The sell-off in the Asian stock markets prompted some fresh safe-haven demand for gold.

Thursday’s batch of U.S. economic data was generally weak, highlighted by the weekly jobless claims report that showed more claims than expected and the second-quarter gross domestic product reading that was just on the weak side. Pending U.S. home sales also did not meet expectations. The weaker U.S. data sunk the U.S. dollar index and caused gold prices to extend their overnight gains.

The London P.M. gold fixing is $1,413.50 versus the previous P.M. fixing of $1,382.50.

Technically, August gold futures prices closed nearer the session high and hit a fresh two-week high Thursday. The gold bears still have the overall near-term technical advantage, but the bulls did gain a bit of upside momentum Thursday. Prices are still in a 7.5-month-old downtrend on the daily bar chart. However, good gains in the near term would begin to produce a bullish double-bottom reversal pattern on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at this week’s low of $1,372.80. First resistance is seen at Thursday’s high of $1,417.70 and then at $1,425.00. First support is seen at $1,400.00 and then at Thursday’s low of $1,388.40. Wyckoff’s Market Rating: 3.5

July silver futures prices closed near mid-range Thursday and were supported by short covering and a lower U.S. dollar index. Silver bears still have the overall near-term technical advantage. Prices are in a 7.5-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $23.29 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $22.00. First resistance is seen at Thursday’s high of $23.06 and then at $23.29. Next support is seen at Thursday’s low of $22.31 and then at $22.00. Wyckoff's Market Rating: 3.5.

July N.Y. copper closed up 105 points at 330.75 cents Thursday. Prices closed nearer the session high on short covering. A weaker U.S. dollar index was also supportive for copper today. Copper bulls and bears are on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week’s high of 341.80 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 322.40 cents. First resistance is seen at this week’s high of 334.55 cents and then at 337.50 cents. First support is seen at Thursday’s low of 325.70 cents and then at 322.40 cents. Wyckoff's Market Rating: 5.0.

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By Jim Wyckoff, contributing to Kitco News;

Market Commentary

Ø MEM METALS: June gold futures closed down $27.50 an ounce at $1,397.00 today. Prices closed nearer the session low and hit a fresh three-week low today. The key outside markets were again in a bearish posture for the gold market today as the U.S. dollar index was higher and crude oil prices were weaker. The gold bears are in near-term technical control and gained some downside momentum with today's close below the key psychological level of $1,400.00.

Ø July silver futures closed down $0.699 an ounce at $22.68 today. Prices closed nearer the session low, hit a fresh three-week low and closed at a fresh 31-month low close. The key outside markets were bearish for silver again today as the U.S. dollar index was higher and crude oil prices were weaker. Silver bears are in firm overall technical control. Prices are in a seven-month-old downtrend on the daily bar chart.

Technical levels for 16^th May, 2013:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,374.75	1,429.54
Silver	22.408	23.440

Intraday Levels and view for Gold:

Sell positions @ $1406 with 1^st target @1485 & 2^nd target @ 1365 stop at 1418. The upside penetration of 1418 will call for a rebound towards 1431 & 1449.

Intraday Levels and view for Silver:

Buy positions @ $22.59 with 1^st target @ 23 & 2^nd target @ 23.15 Stop at 22.45. The downside penetration of 22.45 will call for 22 & 21.8.

Economic Calendar:

Date		Economic Indicator	Country	Actual	Forecast		Previous	Effect & Remarks
16th May	Unemployment Claims		US	Pending at 7:00pm	332K	323K		If Actual < Forecast = Good for currency. The number of individuals who filed for unemployment insurance for the first time during the past week
16th May	Philly Fed Manufacturing Index		US	Pending at 8:30pm	2.5	1.3		If Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed manufacturers in Philadelphia
15th May	PPI m/m		US	-0.7%	-0.6%	-0.6%		As Actual < Forecast =Not Good for currency. Change in the price of finished goods and services sold by producers have decreased.

PRECIOUS METALS RECAP

April Gold closed up 6.6 at 1581.5. This was 15.1 up from the low and 2.8 off the high.

The gold market waffled around both sides of unchanged today suggesting that the market continues to lack a definitive fundamental focus. Clearly gold continues to be negatively impacted by positive economic views and for some gold bulls that is discouraging. For the time being gold seems to be fearful of a decent US payroll report on Friday morning but at some point one might expect long liquidation off flight to quality to run its course. However, the Dollar remains very strong at the expense of the Euro and most other currencies and that might be giving some gold bears an added incentive to press prices downward.

May silver forged a rather wide trading range today but one might suggest that silver outperformed the gold market at times on the upside track. At times today silver seemed to be tracking with platinum and less with gold but in the end the industrial metals track was less than impressive today. While gold was at times undermined by positive US scheduled data flows and higher equities, the silver market seemed to become less concerned about that type of thinking as the session progressed. However, it could still be a little premature to think that silver is poised to benefit from positive US economic views.

Technical Outlook

COMEX SILVER (MAY) 03/07/2013:The next upside objective is 2946.0. The next area of resistance is around 2922.0 and 2948.0, while 1st support hits today at 2872.0 and below there at 2834.0.

COMEX GOLD (APR) 03/07/2013: The next downside target is 1560.8. The next area of resistance is around 1589.0 and 1595.3, while 1st support hits today at 1572.4 and below there at 1560.8.

Market Commentary

Ø The gold market tried to track with physical commodities on the upside today but the trade was unable to sustain that track throughout the trading session. Sharp gains in US equities, favorable US scheduled data flows and a risk-on vibe failed to provide a lift to gold and that suggests the gold trade is still focused on safe haven or flight to quality issues. The bull camp has to be discouraged as the failure to see gold sustain early gains today has to be seen as a negative fundamental signal, especially since the reversal today made the charts in gold look a little suspect.

Ø The silver market showed somewhat impressive initial gains today but in the afternoon trade the May contract settled back to as much as 41 cents an ounce below the initial highs. For the bull camp the action today is really troublesome as that clearly suggests silver isn't currently in a position to benefit from classic physical commodity market developments. Given the potential deterioration in global economic conditions into the US sequester, the rise in uncertainty off the Italian election and the recent concern on the Chinese real estate bubble the flight to quality crowd seemed to have an edge but prices failed to respond. Now that economic conditions have improved and silver has also weakened one has to wonder what condition if any will provide support to silver prices.

Technical levels for 6^th Mar, 2013:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1572.10	1584.67
Silver	28.503	29.003

Intraday Levels and view for Gold:

Sell positions @ $1583 with 1^st target @1571 & 2^nd target @1565 stop at 1587 the upside breakout of 1587 will open the way to 1599 & 1603.

Intraday Levels and view for Silver:

Sell positions @ $28.95 with 1^st target @ 28.4 & 2^nd target @ 28.2 stop at 29.05 the upside penetration of 29.05 will call for a rebound towards 29.45 & 29.65.

Economic Calendar

Date		Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
6th Mar	ADP Non-Farm Employment Change		US	Pending at 6:45pm	172K	192K	If Actual > Forecast = Good for currency. Estimated change in the number of employed people during the previous month, excluding the farming industry and government
5th Mar	ISM Non-Manufacturing PMI		US	56.0	55.0	55.2	As Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry has increased.

Disclaimer:

This report contains the opinion of the author, which is not to be construed as investment advices. The author, Directors, other employees of RiddiSiddhi Bullions Ltd. and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The above-mentioned opinions are based on the information, which is believed to be accurate, and no assurance can be given for the accuracy of the information. The author, directors and other employees and any affiliates of RSBL cannot be held responsible for any losses in trading. In no event should the content of this research report be construed as an express or an implied promise, guarantee or implication by or from RSBL that the reader or client will profit or the losses can or will be limited in any manner whatsoever. Past results are no indications of future performance. Information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. The information contained in this report is no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management or investment advisory services. The reports are only for information purpose and are not to be construed as investment advices.

Daily Market Alert

Market Commentary

Ø Gold opened lower today after selling off a bit overnight as investors seem to be moving their money out of gold in favour of other asset classes. The metal opened at 1690.25/1691.25, quickly hitting its low of 1690.00/1691.00 to then start on a relatively steep ascent to reach a high of 1699.00/1700.00. Gold then traded in narrow bands for the rest of the day, despite surging equities and a weak dollar suggesting investor indecision and a breakdown in correlations.

Ø Silver too remains range bound ahead of the holiday season and looming fiscal cliff issue opening virtually unchanged from Friday’s close at 32.16/32.21, moving up rapidly to its daily high of 32.36/32.41 and then gradually deteriorating. The commodity hit a low of 32.00/32.05 just after 10am to close at 32.20/32.25.

Technical Commentary

Ø Gold closed lower today at 1696. The last signal in MACD remains a sell and the downtrend does not yet show signs of abating. The ADX (from the Directional Movement Index) is at 22 indicating the trend remains strong. The downward-sloping neckline of a potential head-and-shoulders pattern would come in around 1673, and the long term uptrend is not far away at 1658. A break of the neckline would target the low 1600’s which would breach the uptrend support. Resistance is at 1723, the high from December 12th.

Ø Silver closed lower at 32.20. The last MACD signal was also a sell but the trend is much weaker than that for gold, with the ADX below 20 (currently at 15.96). A small head-and-shoulders pattern with a neckline at 32.78 targets $2 lower. This would take us back to November lows in the $30.68 area, which could be fulfilled without breaching the long-term uptrend which comes in around 28.59. The gold-silver ratio is trading higher at 52.72. Resistance is at 54.59, the November high, and support is at 50.26, the November low.

Technical levels for 18^th Dec, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1690.50	1705.40
Silver	31.987	32.688

Economic Calendar:

Date		Economic Indicator	Country	Actual	Forecast		Previous	Effect & Remarks
18th Dec	Current Account		US	Pending at 7:00pm	-105B	-117B		If Actual > Forecast = Good for currency. Difference in value between imported and exported goods, services, income flows, and unilateral transfers during the previous quarter
17th Dec	Empire State Manufacturing Index		US	-8.1	-0.7	-5.2		As Actual < Forecast =Not Good for currency. Level of a diffusion index based on surveyed manufacturers in New York state has Decreased.
17th Dec	TIC Long-Term Purchases		US	1.3B	24.3B	3.3B		As Actual < Forecast =Not Good for currency. Difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigners during the reported period has Decreased.
17th Dec	FOMC Member Lacker Speaks/Stein Speaks		US	NA	Lacker: Economic Outlook, December 2012 Stein: I will focus my remarks on one important aspect of this issue--namely, the growing use of wholesale dollar funding by global financial institutions.

Disclaimer: -

This report contains the opinion of the author, which is not to be construed as investment advices. The author, Directors, other employees of RiddiSiddhi Bullions Ltd. and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The above-mentioned opinions are based on the information, which is believed to be accurate, and no assurance can be given for the accuracy of the information. The author, directors and other employees and any affiliates of RSBL cannot be held responsible for any losses in trading. In no event should the content of this research report be construed as an express or an implied promise, guarantee or implication by or from RSBL that the reader or client will profit or the losses can or will be limited in any manner whatsoever. Past results are no indications of future performance. Information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. The information contained in this report is no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management or investment advisory services. The reports are only for information purpose and are not to be construed as investment advices.