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A.M. Kitco Metals Roundup: Comex Gold Posting Solid Gains on Short Covering, Bargain Hunting

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Comex gold futures prices are trading solidly higher Thursday morning as the market sees some bargain hunting and short covering following Wednesday’s strong selling pressure. There is likely some fresh safe-haven buying interest sprinkled around, too. June gold last traded up $18.10 at $1,566.60 an ounce. Spot gold was last quoted up $4.40 an ounce at $1,567.25.  July Comex silver last traded up $0.611 at $28.125 an ounce.

The market place is still tentative and here are the important overnight developments: There was more weak economic data coming out of the European Union overnight, which continues to suggest that bloc is teetering on collective economic recession. There was nothing major that came out of EU summit meeting on Wednesday. German leader Merkel is still resistant to Euro bond issuance as a part of shoring up the EU’s financial and debt problems. The Euro currency hit a near two-year low versus U.S. dollar overnight. And, there was more weak economic data coming out of China overnight. While the U.S. and European stock markets have stabilized and are trading mostly steady to slightly higher Thursday, investor risk appetite is still far from robust.

The gold market bulls did get somewhat of a boost overnight as the International Monetary Fund reported several countries have added to their official gold reserves.

The U.S. dollar index is trading near steady Thursday morning and hit a fresh 21-month high overnight, on safe-haven buying interest as the Euro currency slumps. The dollar index bulls still have good upside near-term technical momentum. Meantime, Nymex crude oil futures are seeing some short covering Thursday morning after prices hit another 6.5-month low of $89 a barrel on Wednesday. Crude oil remains in a bearish overall fundamental and technical posture.

The London A.M. gold fixing was $1,558.50 versus the previous London P.M. fixing of $1,549.00.

U.S. economic data due for release Thursday includes the weekly jobless claims report, durable goods orders, and the U.S. manufacturing PMI.

Technically,  gold bears still have the overall near-term technical advantage at present. An 11-week-old downtrend is in place on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,600.00. Bears’ next near-term downside price objective is closing prices below solid technical support at last week’s low of $1,526.70. First resistance is seen at $1,575.00 and then at $1,580.00. First support is seen at the overnight low of $1,551.90 and then at $1,540.00.

July silver futures prices are in an 11-week-old downtrend on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $29.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $26.50. First resistance is seen at $28.50 and then at this week’s high of $28.855. Next support is seen at the overnight low of $27.585 and then at this week’s low of $27.08.