Gold Bears Still Growling, Prices Near 1-Year Low

(Kitco News) - Gold pricesaremoderately lower in early-afternoon dealings, and trading near the recent one-yearlow, basis nearby futures (and a 1.5-year low basis the December futurescontract). A stronger U.S. dollar index that is near a 12-month high continuesto scare buyers away from the precious metals markets. December gold futures were last down $5.20 an ounce at $1,222.40. September Comex silver was lastdown $0.047 at $15.405 an ounce.

Thereremains a lack of bullish fundamental news to support new buying interest insafe-haven gold and silver markets. Combine that with the bearish technicalpostures of both metals and dull summertime trading, and you get a gradualdrift lower in prices.

TheWorld Gold Council has reported that gold demand in India will be better in thesecond half of this year, due to good crop harvests and the festival seasons.India and China run neck-and-neck as the leading gold consumer in the world.

Tradersare looking ahead to Friday’s U.S. jobs report for July. Wednesday’s ADPnational employment report for July showed a rise of 219,000. That number washigher than the expected rise of 185,000. The non-farm payrolls number onFriday is forecast to come in at up 190,000. The stronger ADP number suggestsFriday’s figure could come in higher, too.

Theother key “outside market” today finds Nymex crude oil prices solidly higherand trading above $69.00 a barrel. If not for the rally in the oil markettoday, metals prices could be trading even lower.

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Technically,the gold bears have the solid overall near-term technical advantage. There areno early chart clues to suggest a market bottom is close at hand. A 3.5-month-old downtrend is in place on thedaily bar chart. Gold bulls' next upside near-term price breakout objective isto produce a close above solid technical resistance at $1,250.00. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at $1,200.00. First resistance is seen today’s high of$1,230.00 and then at this week’s high of $1,237.80. First support is seen atthe July low of $1,221.00 and then at$1,210.00. Wyckoff's Market Rating: 1.0

Thesilver bears have the solid overall near-term technical advantage. There arestill no early clues to suggest a market bottom is close at hand. Silver bulls'next upside price breakout objective is closing prices above solid technicalresistance at $16.00 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at $15.00. First resistance isseen at this week’s high of $15.635 and then at $15.70. Next support is seen atlast week’s low of $15.34 and then at the July low of $15.185. Wyckoff's MarketRating: 2.0.

SeptemberN.Y. copper closed down 60 points at 274.15 cents today. Prices closed nearerthe session high. The copper bears have the solid overall near-term technicaladvantage. Copper bulls' next upside price objective is pushing and closingprices above solid technical resistance at 300.00 cents. The next downsideprice objective for the bears is closing prices below solid technical supportat the July low of 267.35 cents. First resistance is seen at 277.50 cents andthen at 280.00 cents. First support is seen at today’s low of 270.75 cents andthen at 267.35 cents. Wyckoff's Market Rating: 1.5.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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