P.M. Kitco Metals Roundup: Comex Gold Ends Solidly Lower as ECB Disappoints Market Place
By Jim Wyckoff
Comex gold futures prices ended the U.S. day session with solid losses Thursday. The European Central Bank did not lower its key interest rates at its meeting Thursday, nor did it announce any specific plans to initiate a fresh round of quantitative easing of monetary policy. While most did not expect the ECB to cut rates, many did think the central bank would implement a fresh, significant monetary stimulus plan. When that did not occur most commodity and stock markets felt selling pressure, including the precious metals. December gold last traded down $18.30 at $1,589.00 an ounce. Spot gold was last quoted down $14.10 an ounce at $1,586.50. September Comex silver last traded down $0.56 at $26.975 an ounce.
ECB President Mario Draghi at his ECB press conference following Thursday’s meeting refrained from announcing a fresh monetary stimulus plan for the European Union. However, Draghi did hint that such a plan is coming down the pike. Most commodity market bulls, including the precious metals bulls, were disappointed that no specific plans were announced by the ECB, or by the U.S. Federal Reserve after its FOMC meeting Wednesday. However, the upshot of the ECB and Fed meetings this week is that it appears quantitative easing measures by the U.S. and EU are coming soon. Such would be at least initially bullish for the precious metals. Reasons: Any fresh influx of money pumped into the major world economies would work to stimulate consumer demand, and it would also raise the specter of price inflation.
The Bank of England also met to discuss its monetary policy. Thursday morning’s BOE announcement showed no change in interest rates or monetary policy, which is what the market place expected.
After the batch of central bank meetings are out of the way, focus of the market place is now on the U.S. employment report on Friday morning. The key non-farm payrolls component of the jobs report is expected to have risen by 95,000 in July.
The U.S. dollar index traded higher Thursday, in the wake of the ECB meeting results, while crude oil prices traded lower. Both of these key “outside markets” turned into a bearish posture for the precious metals Thursday, and helped to pressure gold and silver prices.
The London P.M. gold fix is $1,597.00 versus the previous London P.M. fixing of $1,599.00.
Technically, December gold futures prices closed nearer the session low Thursday. The gold market bears now have the slight near-term technical advantage as the bulls have faded the past few trading sessions. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,646.40. Bears’ next near-term downside price objective is closing prices below solid technical support at the July low of $1,559.50. First resistance is seen at $1,600.00 and then at Thursday’s high of $1,618.80. First support is seen at Thursday’s low of $1,586.30 and then at $1,575.00. Wyckoff’s Market Rating: 4.5
September silver futures prices closed nearer the session low Thursday. Silver bears have the overall near-term technical advantage and have regained some downside momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $28.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of $26.425. First resistance is seen at $27.50 and then at Thursday’s high of $27.78. Next support is seen at today’s low of $26.88 and then at $26.425. Wyckoff’s Market Rating: 3.0.
September N.Y. copper closed down 805 points 329.45 cents today. Prices closed near the session low again today and hit a fresh five-week low. Copper bears have the near-term technical advantage and gained more downside momentum today. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 345.70 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of 325.00 cents. First resistance is seen at 333.20 cents and then at 335.00 cents. First support is seen at Thursday’s low of 328.85 cents and then at 325.00 cents. Wyckoff’s Market Rating: 3.5.