Gold Hits 3.5-Mo. High As Big Downdraft In U.S. Dollar Aids Precious Metals Bulls
New York (Feb 4) Gold prices ended the U.S. day session solidly higher and hit a 3.5-month high Thursday. Add the slumping U.S. dollar index to the list of bullish elements helping to drive gold and silver prices higher recently. Silver prices also scored a 3.5-month high Thursday. Safe-haven and technical buying continue to support the yellow metal amid volatile world stock markets that presently still have a downside bias. April Comex gold was last up $15.30 at $1,156.60 an ounce. March Comex silver was last up $0.126 at $14.86 an ounce.
The sharply lower U.S. dollar index the past couple days has helped to lift raw commodity markets. A weak U.S. manufacturing report on Wednesday spiked the dollar index lower, and there was follow-through selling pressure on the greenback Thursday. Most raw commodities on the world market are priced in U.S. dollars. A decline in the value of the dollar makes those commodities less expensive to purchase with non-U.S. currency.
The marketplace is now awaiting Friday morning’s U.S. employment report for January. The key non-farms payroll number is expected to be up 185,000 following a strong rise of 292,000 in December. A number outside of market expectations is likely to cause higher price volatility, at least in the aftermath of the 8:30 a.m. eastern standard time report.
Technically, April gold futures closed prices hit a 3.5-month high today and closed nearer the session high. Prices are in a six-week-old uptrend and the bulls have technical momentum on their side. Bears also have gained the slight overall near-term technical advantage for the first time in months. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,175.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,130.00. First resistance is seen at today’s high of $1,157.30 and then at $1,165.00. First support is seen at $1,150.00 and then at today’s low of $1,139.70. Wyckoff’s Market Rating: 5.5
March silver futures prices closed nearer the session high and hit another three-month high today. While the silver market bears still have the slight overall near-term technical advantage, recent price action has been bullish, including prices now in a three-week-old uptrend on the daily bar chart. A bullish “rounding-bottom” reversal pattern has also formed on the daily chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.25. First resistance is seen at today’s high of $14.93 and then at $15.00. Next support is seen at today’s low of $14.65 and then at $14.50. Wyckoff's Market Rating: 4.5.
March N.Y. copper closed up 350 points at 213.00 cents today. Prices closed nearer the session high and hit another four-week high today. A big downdraft in the U.S. dollar index the past two days has also helped the copper market bulls. The copper bears still have the overall near-term technical advantage but the bulls have gained some upside momentum. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 220.00 cents.