Gold Price Rallies On End-Of-Year Short Covering, Bargain Buying
New York (Dec 29) Gold prices ended the US day session solidly higher and hit a two-week high Thursday. A drop in the U.S. dollar index on this day prompted good short covering in the futures market and some bargain hunting in the cash market. If there is decent follow-through buying interest and a technically bullish weekly high close on Friday, such would be an early chart clue that the gold market has put in at least a near-term low, if not a major low. February Comex gold was last up $16.30 an ounce at $1,157.20. March Comex silver was last up $0.162 at $16.20 an ounce.
Marketplace focus was on the weaker U.S. dollar Thursday. However, price action was just a corrective pullback from recent gains that see prices still not far below last week’s 13-year high for the U.S. dollar index. The greenback bulls remain strong.
The other key “outside market” on Thursday saw Nymex crude oil prices trade slightly lower. Oil market watchers are waiting to see if OPEC and Russia oil producers can stick to their agreed-upon plan to reduce production. Many are skeptical. That plan goes into effect January 1.
There have been no major fundamental news developments this week to help drive precious metals markets. As the new year gets under way next week, look for more active trade in many markets.
Technically, February gold futures prices closed near the session high and hit a two-week high today. Follow-through buying on Friday and a bullish weekly high close would suggest at least near-term bottom, if not a longer-term bottom being in place. The gold bears still have the firm overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,180.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,124.30. First resistance is seen at today’s high of $1,160.60 and then at $1,170.00.
Source: KitcoNews
