Gold Near Steady in Quiet, Pre-Holiday Trading

New York (Dec 24)  Gold prices are not straying far from unchanged levels in early U.S. trading Wednesday. Markets were generally quiet overnight on this Christmas Eve day. U.S. markets close early today and many traders and investors have already checked out for the week, if not for the rest of the year. February Comex gold was last up $0.40 at $1,178.40 an ounce. Spot gold was last up $0.80 at $1,178.25. March Comex silver last traded up $0.053 at $15.82 an ounce.

The buzz in the market place at present is the dramatic rebound in the U.S. stock indexes the past week. The indexes were left for dead last week, but have come roaring back to establish record highs in the Dow (above 18,000) and S&P stock indexes. The big money flows back into the stock markets worldwide have dented many raw commodity markets, including gold and silver.

Market watchers are also discussing Tuesday’s big third-quarter GDP growth number, at up 5.0%, which is the strongest economic growth in a decade. The report falls squarely into the camp of U.S. monetary policy hawks.

Crude oil prices are lower Wednesday. The bears are in firm command as prices hover near a five-year low. The other key “outside market” finds the U.S. dollar index weaker on mild profit taking after hitting a four-year high Tuesday. The stronger greenback recently has also been a significant bearish weight on raw commodity markets.

The Russian ruble has stabilized this week, following last week’s serious erosion against the U.S. dollar and other major currencies. Reports Tuesday said the Russian central bank sold $420 million of its foreign currency reserves last week to support the beleaguered ruble. Reports today said a major credit ratings agency is considering downgrading Russia’s credit rating to junk status.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, weekly jobless claims and the weekly DOE liquid energy stocks report.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Wyckoff’s Daily Risk Rating: 6.0 (Geopolitical risk assessment has faded a bit, but risks have not evaporated.)

(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 fixing is $1,177.00 versus the previous P.M. fixing of $1,175.75.

Technically, gold bears possess the overall near-term technical advantage. The gold bulls’ next upside ear-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,203.60. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at Tuesday’s high of $1,184.90 and then at $1,190.00. First support is seen at this week’s low of $1,170.70 and then at $1,160.00.

March silver futures bears have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the December high of $17.355 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at $16.00 and then at this week’s high of $16.175. Next support is seen at this week’s low of $15.53 and then at last week’s low of $15.25.

SOURCE: KitcoNews