02 September 2010, 2:12 p.m.
By Jim Wyckoff
Of Kitco News
www.kitco.com
Comex gold futures prices ended higher, near the daily high and posted a fresh nine-week high close Thursday, boosted by a weaker U.S. dollar. Traders are awaiting Friday morning's key U.S. employment report. Look for a flurry of trading activity just after the 8:30 a.m. EDT release of the jobs report. December gold last traded up $4.80 an ounce at $1,252.90. Spot gold was last quoted up $7.10 at $1,252.00.
The U.S. dollar index was trading lower Thursday, pressured in part by some better economic news coming out of the European Union that did support the Euro currency. The greenback bulls are fading this week. Further weakness in the U.S. currency will continue to attract buying interest in the precious yellow metal.
U.S. economic data out Thursday had little price impact on the gold market. Precious metals traders are anxiously awaiting Friday's U.S. employment report, which is expected to show the key non-farm payrolls figure to be down 123,000 in August, following a decline of 131,000 jobs in July. The unemployment rate is forecast to come in at 9.6% from the July reading of 9.5%. Gold would likely get a price boost if the jobs report shows significantly more weakness than expected, and would likely be pressured by a stronger-than-expected jobs reading.
News reports overnight said physical demand for gold remains strong, especially in India, despite the recent rally in gold prices. Reports also said gold holdings in the big SPDR Gold Shares fund rose by 1.5 metric tons Wednesday.
The London P.M. gold fixing was $1,248.50 versus the previous P.M. fixing of $1,246.50 an ounce.
Technically, December gold futures bulls still have upside technical momentum, have the solid technical advantage and are still poised to challenge the all-time high of $1,270.60, scored in June. Prices are in a five-week-old uptrend on the daily bar chart. Bulls' next near-term upside technical objective is to produce a close above solid chart resistance at the all-time high of $1,270.60. Bears' next near-term downside price objective is closing prices below solid technical support at this week's low of $1,233.50. First resistance is seen at this week's high of $1,256.60 and then at $1,259.00. Support is seen at $1,250.00 and then at Thursday's low of $1,245.30. Wyckoff's Market Rating: 7.5.
December silver futures closed up 25.2 cents at $19.645 an ounce Thursday. Prices closed nearer the session high and hit a fresh 3.5-month high early on. The key "outside markets" were in a bullish posture for silver again Thursday, as the U.S. dollar index was weaker, while crude oil and U.S. stock index prices were firmer. Silver bulls have the solid near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at this week's low of $18.86. Bulls' next upside price objective is closing prices above solid technical resistance at the May high of $19.915 an ounce. First resistance is seen at Thursday's high of $19.715 and then at $19.915. Next support is seen at $19.50 and then at Thursday's low of $19.345. Wyckoff's Market Rating: 8.0.
December N.Y. copper closed up 105 points at 348.80 cents Thursday. Prices closed near mid-range today and hit another fresh four-month high. The bulls have the near-term technical advantage and have upside near-term technical momentum to suggest more gains are in the offing in the near term. Bulls' next upside objective is pushing and closing prices above solid technical resistance at 360.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 330.00 cents. First resistance is seen at Thursday's high of 350.45 cents and then at 352.50 cents. First support is seen at Thursday's low of 345.20 cents and then at 343.05 cents. Wyckoff's Market Rating: 7.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com