10/08/2013

P.M. Kitco Roundup: Gold Ends Near Steady; Market Place Hamstrung by U.S. Gov’t Closure
Tuesday October 8, 2013 1:42 PM
(Kitco News) - Comex gold prices ended the U.S. day session near unchanged and in the middle of the day’s narrow trading range Tuesday. Gold and silver markets languished on a lack of fresh, bullish fundamental inputs. Some mild safe-haven demand in gold Tuesday was offset by selling due to the weak technical posture of the metal. The focus of the market place continues on the closure of the U.S. government and lack of progress toward reopening it. December Comex gold was last down $0.40 at $1,324.70 an ounce. Spot gold was last quoted up $2.40 at $1325.25. December Comex silver last traded up $0.044 at $22.435 an ounce.
The partial U.S. government shutdown is in its eighth day with still no serious movement from either Democrats or Republicans. In fact, the Republican Congress and President Obama appeared to “dig in their heels” farther on Tuesday. There is a rising unease in the world market place at present, but there is still not yet anything close to panic. The date now being pegged is October 17—the date at which some U.S. government officials now say the U.S. will start to default on its credit obligations. It appears the budget impasse and government closure could lead right up to the U.S. debt ceiling limit.
Some gold market bulls have expressed frustration their metal has not seen stronger safe-haven demand amid the latest U.S. government fiasco. Some are saying gold has lost its safe-haven mojo because it’s been in a technical downtrend for months. More likely is that the market place now has “U.S. government dysfunction fatigue.” Traders and investors have recently been bombarded with news headlines on the government’s shutdown and debt limit situations. They are numb to the situation, at present. And in the past 18 months U.S. budget and debt ceiling wrangling had also gripped the market place for a time. Most of the market place still feels the U.S. government will pass a budget and raise its debt ceiling at the 11th hour.—but not before the usual grandstanding, jawboning, posturing, bickering and politicking that U.S. lawmakers do in situations like this. However, in the very unlikely scenario that the U.S. government actually starts to default on its debt, or gets its credit rating downgraded by a major credit rating agency, then gold will exhibit its safe-haven status in the market place, and do so in no uncertain terms.
The World Bank and International Monetary Fund hold annual meetings in Washington, D.C., at the end of this week. It would be at the very least awkward to see the host nation and the world’s leading economy and military hobbled by a government shutdown in effect. Any proclamations or overtures made by the U.S. at the meeting would be at least somewhat discounted by the inability of U.S. lawmakers to agree on a spending plan.
U.S. economic data released Tuesday included the NFIB small business index, the weekly Goldman Sachs and Johnson Redbook retail sales reports, the IDB/TIPP economic optimism index, and the IMF world economic outlook. None had much of an impact on the precious metals. Most U.S. government economic data is not being released due to the U.S. government closure. However, the Fed’s FOMC minutes will be released Wednesday and will be closely scrutinized by the market place. Federal Reserve officials are speaking this week. Traders and investors will be interested in seeing what these officials say about the U.S. government shutdown’s impact on the U.S. economy. Two officials spoke on Tuesday, but markets reacted little, if any, to their remarks.
The London P.M. gold fix is $1,329.50 versus the previous P.M. fixing of $1,323.50.
Technically, December gold futures prices closed near mid-range Tuesday. The gold market bears still have the slight overall near-term technical advantage. A six-week-old downtrend is still in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,353.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the August low of $1,271.80. First resistance is seen at Tuesday’s high of $1,330.80 and then at $1,337.80. First support is seen at Tuesday’s low of $1,315.40 and then at this week’s low of $1,307.90. Wyckoff’s Market Rating: 4.5
December silver futures prices closed nearer the session high and poked to another fresh two-week high Tuesday. Short covering was featured. Silver bears still have the slight overall near-term technical advantage. However, a six-week-old downtrend on the daily bar chart has been a least temporarily negated. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $23.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $20.63. First resistance is seen at Tuesday’s high of $22.525 and then at $23.00. Next support is seen at Tuesday’s low of $22.11 and then at $22.00. Wyckoff's Market Rating: 4.5.
December N.Y. copper closed down 40 points at 329.25 cents Tuesday. Prices closed nearer the session low. Trading has become choppy recently. Copper bulls and bears are still on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the September high of 335.95 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the September low of 319.05 cents. First resistance is seen at Tuesday’s high of 332.15 cents and then at last week’s high of 333.95 cents. First support is seen at Tuesday’s low of 328.25 cents and then at this week’s low of 326.40 cents. Wyckoff's Market Rating: 5.0.