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A.M. Kitco Metals Roundup: Gold Steady-Weak, But Hits 4-Week High Overnight, As Bulls Gain Momentum
Monday January 13, 2014 8:17 AM
(Kitco News) - Comex gold prices are steady to weaker in early U.S. trading Monday, after hitting a four-week high overnight. Friday’s technically bullish weekly high closes in gold and silver futures give the bulls some upside near-term technical momentum. February gold was last down $1.20 at $1,245.60 an ounce. Spot gold was last quoted down $2.80 at $1246.50. March Comex silver last traded down $0.178 at $20.04 an ounce.
Traders continue to digest last Friday’s much-weaker-than-expected U.S. jobs report, which begins to suggest the Federal Reserve pay have to taper its just-implemented tapering program. The big miss to the downside on non-farm jobs growth in December now makes upcoming U.S. economic data that much more important, to see if a trend of weaker reports is developing. The U.S. dollar index hit a two-week low on Monday and U.S. Treasury bonds hit a three-week high, in the wake of the dismal jobs report released Friday. If the greenback continues to weaken and U.S. Treasuries continue to strengthen, that would be a bullish development for the precious metals markets and for other raw commodity markets.
In overnight news, Iran and six world powers this weekend agreed to move to the next step in the winding down of Iran’s nuclear weapons program. This put some pressure on crude oil markets, given the present embargo that limits Iran’s oil being sold on the world market, which would end if Iran continues to cooperate with the major world powers.
The physical gold market in Asia could see better demand in the very near term as the Chinese Lunar New Year holiday begins on January 31. That holiday typically sees gold as a popular gift.
U.S. economic data due for release Monday includes the employment trends index and the monthly Treasury budget statement.
Wyckoff’s Daily Risk Rating: 5.0 (No apparent, significantly market-sensitive events today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
The London A.M. gold fix is $1,246.00 versus the P.M. fixing of $1,244.25.
Technically, February gold futures bears still have the overall near-term technical advantage. However, last Friday’s bullish weekly high close and the upside price action to start the new year have given the bulls some upside technical momentum. The gold bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at the December high of $1,267.50. Bears' next near-term downside breakout price objective is closing prices below technical support at last week’s low of $1,212.60. First resistance is seen at the overnight high of $1,255.30 and then at $1,260.00. First support is seen at the overnight low of $1,244.50 and then at $1,240.00.  
March silver futures bears still have the overall near-term technical advantage. However, the silver bulls have gained some upside near-term technical momentum recently. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $20.48 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $18.72. First resistance is seen at the overnight high of $20.365 and then at the January high of $20.44. Next support is seen at $19.75 and then at Friday’s low of $19.545.