Gold Steadies with Market Pause while Bulls in Technical Advantage Posted by Adam King on September 17, 2012
September 17, 2012 – Comex gold prices are close to unchanged in early trading on Monday as the market pauses and experiences some chart consolidation after the big gains through last week. On Friday, contracts for December delivery reached a six-month high at $1,780.20 per troy ounce. Precious metals market bulls hold a solid near-term technical control as spot gold shifted down $1.40 per troy ounce to $1,769.75. Comex silver for December delivery traded down $0.106 to $34.55 per troy ounce.
Most markets appear to be at a pause in the start of the new trading week following last week’s announcement from the U.S. Federal Reserve that brought another round of quantitative easing, nicknamed QE3 and projected to last for the foreseeable future. That scope and nature of the announcement was enough to shock markets that had already, for the most part, priced in QE3 before the announcement.
Underlying concern regarding the sovereign debt crisis in the European Union has been under the radar but may rise to more visibility now that the much-anticipated easing has been announced. EU officials continue to meet and work in an attempt to stabilize the crisis, but disagreements, sometimes public, continue to hamper the process. Gold and silver continue to benefit from the EU crisis as investors look for stability amid the problems in Europe.
The U.S. dollar index is firmer in early trading on Monday after hitting a fresh four-month low. Bears have the near-term technical advantage as a two-month-old downtrend continues on the daily bar chart. Crude oil prices are slightly lower on Monday morning on some mild profit taking after prices hit a five-month high on Friday above $100.00 per barrel. These outside markets, as they’re known, show a mildly bearish posture for precious metals on Monday morning.
The London A.M. gold fix is at $1,767.25 against the previous A.M. fix at $1,775.50.
From a technical perspective, December gold futures prices closed the session on Friday with firmer prices bringing bulls the upside technical advantage, suggesting a challenge of the 2012 high at $1,800.90 per troy ounce. Gold bulls have the near-term technical advantage, even with chart consolidation in Monday trading.
December silver futures prices hit a six-month high on Friday as silver bulls moved into strong near-term technical command. Prices have been in a seven-week uptrend on daily bar charts and the next breakout point for silver is the technical resistance at $36.00 per troy ounce.