Gold Slightly Up Amid Bullish Outside Markets, Weaker U.S. Data
New York (Feb 12) Gold ended the U.S. day session slightly higher in quieter trading Thursday. The market got a boost on the key outside markets being in a bullish posture on this day—solidly higher crude oil prices and a lower U.S. dollar index. Short covering in the futures market from Wednesday’s selling pressure was also featured. However, better trader and investor risk appetite that boosted the stock markets squelched buyer interest in safe-haven gold. April Comex gold was last up $2.00 at $1,221.60 an ounce. March Comex silver last traded up $0.049 at $16.81 an ounce.
Some weaker U.S. economic data—a decline in retail sales and a rise in jobless claims—also favored the precious metals market bulls Thursday. However, overall, it was a “risk-on” day in the market place Thursday as European and U.S. stock markets were in rally mode. U.S. stock indexes are back near their recent for-the-move highs and have regained upside technical momentum.
There was progress made at a meeting in Belarus of Western powers, the Ukraine and Russia Thursday. A ceasefire between Ukraine and Russian rebels goes into effect Sunday. However, most agreed much more heavy lifting will be needed to end the conflict. German Chancellor Merkel praised the efforts of Russian President Putin on the meeting’s progress. The Russian ruble saw a modest rally on the news.
Markets paid little attention to the end of a meeting in Brussels, Belgium between European Union officials and Greece that produced no significant results, reports said. The principals agreed to keep talking. Greece’s new government says it is abandoning a good portion of its debt reduction and austerity measures. Greece needs a new financing package by the end of this month. This matter won’t just go away and will continue to be a sore spot with world markets. U.S. and European stock market gains Thursday were tempered on the lack of progress in the discussions.
The Bank of England hinted Thursday it will raise interest rates in 2016, despite world deflation fears and falling inflation in the U.K. Sweden on Thursday became the latest central bank to lower its interest rates.
The World Gold Council said Thursday world gold demand fell 4% in 2014. Indian gold consumption was at a five-year low last year, said the WGC. The Indian government in recent years has implemented duties on gold in order to curb demand. India was still reported as the top gold importer, just ahead of China.
The London P.M. gold fix was $1,222.50 versus the previous A.M. fixing of $1,225.25.
Technically, April gold futures bears have the overall near-term technical advantage as a downtrend line is in place on the daily bar chart and prices Wednesday hit a four-week low. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,245.90. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,232.80 and then at Wednesday’s high of $1,238.70. First support is seen at this week’s low of $1,216.50 and then at $1,210.00.
March silver futures bears have the overall near-term technical advantage as prices are in a three-week-old downtrend. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $17.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at this week’s high of $17.145 and then at $17.37. Next support is at last week’s low of $16.545 and then at last week’s low of $16.25.