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A.M. Kitco Metals Roundup: Comex Gold Weaker as Market Place Awaits EU Summit News

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By Jim Wyckoff

Comex gold futures prices are moderately lower in early U.S. trading Thursday, as traders lack conviction ahead of the latest European Union summit meeting taking place in Brussels starting Thursday. Trading has been choppy in the gold market on a daily basis this week. August gold last traded down $10.00 at $1,568.40 an ounce. Spot gold was last quoted down $5.10 an ounce at $1,569.50.  July Comex silver last traded down $0.107 at $26.835 an ounce.

The EU summit expectations are so low that many reckon any positive news coming out of the gathering could rally world stock markets. European stock markets were weaker Thursday, with U.S. stock indexes also weak in early screen trading. There was a news report just out that a German finance official said at the EU meeting Germany may be willing to share the debt load of the EU. That flies in the face of hawkish comments this week from German Chancellor Angela Merkel.

In other news, an EU business and consumer confidence survey shows a dour mood throughout the EU region, while a German labor market report showed a weakening job sector.

There are also reports Turkey is sending military convoy to Syrian border following Syria shooting down a Turkish jet. If a military exchange between those two countries occurs, gold could see fresh safe-haven demand quickly surface.

Also Thursday, the U.S. Supreme Court is expected to rule on the merits of President Obama’s health care plan. Reaction to such is not likely to seriously rattle the market place.

The U.S. dollar index is near steady Thursday morning and did hit a fresh two-week high overnight. The greenback bulls still have some upside near-term technical momentum. Meantime, Nymex crude oil futures prices are also near steady. Crude oil remains in a solid overall bearish fundamental and technical posture.

The London A.M. gold fix is $1,567.75 versus the previous London P.M. fixing of $1,573.50.

U.S. economic data due for release Thursday includes revised corporate profits, the third-quarter GDP estimate, weekly jobless claims, and the Fed’s Kansas City manufacturing survey.

Technically, August gold futures bears still have the overall near-term technical advantage. A minor bearish pennant pattern has formed 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 the May low of $1,529.30. First resistance is seen at the overnight high of $1,579.60 and then at this week’s high of $1,589.00. First support is seen at the overnight low of $1,566.10 and then at last week’s low of $1,558.60.

July silver futures bears still have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $29.095 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the September 2011 low of $26.20. First resistance is seen at Wednesday’s high of $27.275 and then at this week’s high of $27.59. Next support is seen at last week’s low of $26.51 and then at $26.20.