Gold, Silver end weaker but up from daily lows

By Jim Wyckoff
(Kitco News) - Comex Gold and Silver futures prices ended weaker Wednesday on profit-taking pressure from recent gains. However, both precious metals did move well off their daily lows by the close, as bargain hunters stepped in to buy the dip in prices.

The profit taking is not unexpected nor is it unhealthy during a bull market move. Investor risk appetite in the market place is on the upswing, which has pulled away safe-haven demand for the precious metals. August gold last traded down $3.60 at $1,597.50 an ounce. Spot gold last traded up $1.00 an ounce at $1,590.25. December Comex silver last traded down $0.664 at $39.581 an ounce.

There are some fundamental developments at work which are boosting, at least temporarily, investor risk appetite in the marketplace. That's near-term bearish for gold and silver. President Obama said Tuesday he is encouraged by a Senate plan on dealing with the U.S. debt-ceiling. It appears other U.S. lawmakers may now also be ready to strike a deal on the contentious matter. Also, on Tuesday evening Apple came out with stunningly strong earnings results for the quarter. The Apple news followed other recent good earnings reports. There are also notions the European Union leaders will make some progress on sovereign debt matters at their summit meeting Thursday.

The U.S. dollar index traded lower again Wednesday, as the bears are gaining fresh downside technical momentum. The weaker dollar index limited selling pressure in the precious metals. If the index does begin to trend lower again, that would be an underlying bullish fundamental for the precious metals.

Crude oil prices traded higher again Wednesday, which is also an underlying bullish factor for the precious metals. Crude Oil bulls are gaining some upside momentum this week.

The London P.M. gold fixing was $1,586.00 versus the previous P.M. fixing of $1,601.00.

Technically, August gold futures prices closed nearer the session high Wednesday. The market had become over-extended on the upside and was due for a corrective pullback. Wednesday's high-range close did prevent a significantly bearish "key reversal" down from being confirmed on the daily bar chart. Gold bulls still have the solid overall near-term technical advantage. Bulls' next near-term upside technical objective is to produce a close above resistance at $1,625.00. Bears' next near-term downside price objective is closing prices below solid technical support at the June high of $1,559.30. First resistance is seen at Wednesday's high of $1,600.80 and then at the record high of $1,610.70. First support is seen at $1,590.00 and then at Wednesday's low of $1,581.10. Wyckoff's Market Rating: 8.0.

December Silver futures prices closed nearer the session high Wednesday. The silver bulls still have the overall technical advantage. Bulls' next upside price objective is producing a close above solid technical resistance at this week's high of $40.90 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $38.00. First resistance is seen at Wednesday's high of $39.865 and then at $40.00. Next support is seen at $39.00 and then at $38.50. Wyckoff's Market Rating: 7.0.

December N.Y. Copper closed down 255 points 446.10 cents Wednesday. Prices closed nearer the session low and saw mild profit-taking pressure. A weaker U.S. dollar index today did limit the downside in copper. The copper bulls have the solid overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 457.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 433.05 cents. First resistance is seen at 447.50 cents and then at Wednesday's high of 449.35 cents. First support is seen at Wednesday's low of 444.70 cents and then at 442.35 cents. Wyckoff's Market Rating: 7.0.

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