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A.M. Kitco Metals Roundup: Comex Gold Modestly Up on Safe-Haven Demand Ahead of Key Events

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By Jim Wyckoff

Comex gold futures prices are modestly higher in cautious early U.S. trading Friday. The market place is tentative ahead of this weekend’s potentially pivotal Greek elections. August gold last traded up $4.10 at $1,623.70 an ounce. Spot gold was last quoted down $0.50 an ounce at $1,623.25.  July Comex silver last traded up $0.248 at $28.655 an ounce.

Reports Thursday afternoon said the major central banks of the world stand at the ready to inject liquidity into the world financial system should markets become roiled after the Greek elections on Sunday. There are rumors polls are showing the pro-austerity party is poised for victory. European, Asian and U.S. stock markets were modestly higher overnight as fears and worries were somewhat assuaged by the central bank jawboning.

After the Greek elections attention will quickly turn to next week’s meeting of the U.S. Federal Reserve’s Federal Open Market Committee, which will determine the next course of U.S. monetary policy. The recent generally downbeat U.S. data has led to growing expectations for further easing of U.S. monetary policy—nicknamed “QE3.” More U.S. monetary easing (printing money) would likely be at least temporarily bullish for the commodity markets, including the precious metals.

Finally, Friday is “quadruple witching” day in the U.S. stock indexes, whereby futures and options expire today. That could add some volatility to the stock indexes later today.

The U.S. dollar index is trading slightly lower Friday morning and hit a fresh three-week low overnight, which is bullish for the precious metals. Meantime, Nymex crude oil futures prices are firmer Friday morning on short covering. Crude oil remains in an overall bearish fundamental and technical posture.

The London A.M. gold fix is $1,622.25 versus the previous London P.M. fixing of $1,613.50.

U.S. economic data due for release Friday includes the Empire State manufacturing survey, Treasury international capital data, industrial production and capacity utilization, and the University of Michigan consumer sentiment survey.

Technically, gold futures bulls are having the better week as bulls have gained the slight near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,642.40. Bears’ next near-term downside price objective is closing prices below solid technical support at last week’s low of $1,556.40. First resistance is seen at the overnight high of $1,629.00 and then at $1,632.00. First support is seen at Thursday’s low of $1,610.40 and then at $1,600.00.

July silver futures bulls and bears are doing near-term technical battle amid choppy trading, with neither gaining much headway. Bears still have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above major psychological resistance at $30.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of $27.17. First resistance is seen at this week’s high of $29.095 and then at $29.50. Next support is seen at this week’s low of $28.15 and then at $28.00.