Comex on Corrective Bounce, Bulls on Defense Posted by James Randolph on June 22, 2012
June 22, 2012 – Comex gold futures are slightly higher in early US trading on Friday as investors
are short covering and bargain hunting following Thursday’s pronounced sell-off. The
gold bulls are still on the defensive and need to avoid short-term technical damage via a
fresh display of power. Gold for August delivery last traded up $3.60 to $1,569.10 per
troy ounce. The spot price of gold was quoted up $2.80 per ounce at $1,568.50. Comex
silver for July delivery last traded down $0.054 at $26.785 per ounce.
Markets had stabilized a bit by Friday morning after the Thursday sell-off in
many markets, including commodities and the stock indexes. Still, a “risk-off” mentality
envelops the market place heading into the weekend.
So far, the market has registered few ripples from the news late Thursday that
Moody’s downgraded the credit ratings of 15 major world banks. Investors were not
particularly surprised by the news.
Relatively sluggish economic data from the world’s major economic powers,
which includes Thursday’s weak US data and the latest manufacturing activity out of
China, have raised fears of deflation worldwide.
The US dollar index is slightly higher Friday morning as the greenback bulls
show near-term momentum towards the upside after the gains made on Thursday. Nymex
crude oil futures prices are higher on short covering and hit an eight-month low of
$77.56 per barrel overnight. Crude oil exhibits overall bearish fundamental posture with
supporting technical factors.
The London AM gold fix registered $1,571.50 from the previous London PM fix
August gold futures prices closed close to the session low at a fresh three-week
low Thursday. Gold market bears regained near-term technical advantage. For bulls to
retake the advantage, they must produce a close above solid technical resistance, which
currently stands at the June high of $1,642.40.
Silver futures for July delivery marked a new six-month low overnight after a
Thursday eighteen-month low close. Silver endured serious near-term technical damage
Thursday. The near-term technical advantage was clearly transferred to the bear market
proponents Thursday. The next level to breach for a bull market is a close above last
week’s high of $29.095 per troy ounce.