Gold Gains As Traders Buy The Early Dip

(Kitco News) - Gold prices are ending the U.S. day session modestly up and were poised to close ata more-than-three-month-high close Thursday. Silver prices were ending nearsteady and hit a six-week high today. Some early profit-taking pressure wasviewed as a bargain buying opportunity by the precious metals bulls. February Comex gold was last up $2.20 an ounce at $1,320.70. March Comex silver was lastdown $0.002 at $17.265 an ounce.

Thursday'sU.S. ADP national employment report for December showed a rise of 250,000,which was significantly higher than the increase of 195,000 that was expected.Gold and silver prices down-ticked on the news, but quickly recovered as thebargain buyers stepped in.

Now,traders and investors are looking ahead to Friday's U.S. employment report fromthe Labor Department. This report is arguably the most important U.S. datapoint of the month. The key December non-farm payrolls number is forecast tocome in at up 180,000. However, a beat to the upside on this report could dentbullish enthusiasm in the precious metals markets, on notions the FederalReserve would be more likely to raise interest rates at a faster pace. However,it's my bias that rising U.S. interest rates are pretty much factored into themarketplace for 2018.

Worldstock markets were mostly firmer Thursday. There was some upbeat economic datafrom China released Thursday, to help boost world equity markets. U.S. stockindexes hit more new record highs today. The rallying world stock markets are abearish element for the competing asset class of precious metals.

Tensionsin Iran are still not far from the front burner of the market place. Thismatter is still supporting some safe-haven gold and silver markets, as well asboosting the crude oil market.

Thekey outside markets were in a bullish daily posture for the precious metals onThursday. The U.S. dollar index was lower. Meantime, Nymex crude oil prices werehigher and hit a three-year high above $62.00 a barrel.

Technically,Februarygold futures prices closed nearer the session high. The bulls have theoverall near-term technical advantage, amid a three-week-old uptrend being inplace on the daily bar chart. Gold bulls' next upside near-term price breakoutobjective is to produce a close above solid technical resistance at $1,350.00.Bears' next near-term downside price breakout objective is pushing prices belowsolid technical support at $1,280.00. First resistance is seen at this week'shigh of $1,323.00 and then at $1,230.00. First support is seen at $1,310.00 andthen at this week's low of $1,304.60. Wyckoff's Market Rating: 6.0

Marchsilver futures prices closed nearer the session high and hit a six-week hightoday. The bulls have the overall near-term technical advantage. Prices are ina steep three-week-old uptrend on the daily bar chart. Silver bulls' nextupside price breakout objective is closing prices above solid technical resistanceat $18.00 an ounce. The next downside price breakout objective for the bears isclosing prices below solid support at the October low of $16.435. Firstresistance is seen at $17.37 and then at $17.50. Next support is seen at thisweek's low of $16.985 and then at $16.75. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed up 40 points at 326.15 cents today. Prices closed nearer thesession low today. The copper bulls have the solid overall near-term technicaladvantage. Copper bulls' next upside price objective is pushing and closingprices above solid technical resistance at 340.00 cents. The next downsideprice objective for the bears is closing prices below solid technical supportat 310.00 cents. First resistance is seen at today's high of 329.80 cents andthen at the contract high of 332.20 cents. First support is seen at this week'slow of 323.65 cents and then at 320.00 cents. Wyckoff's Market Rating: 8.0.

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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