Jim Wyckoff: “A.M. Kitco Metals Roundup: Gold Lower On Profit Taking And As Imminent U.S. Military Action Vs. Syria Receding” – Kitco

Posted on :Aug 30, 2013

By: Jim Wyckoff

Kitco

August 30, 2013

Gold prices are solidly  lower in early U.S. trading Friday, on profit-taking pressure from the  shorter-term traders, and as odds decrease the U.S. will very soon take  military action against Syria. December Comex gold was last down $17.10 at $1,395.70  an ounce. Spot gold was last quoted down $10.90 at $1396.75. September Comex  silver last traded down $0.38 at $23.71 an ounce.

Notions of an imminent  U.S. military attack on Syria have receded significantly the past 48 hours, as  U.S. allies are backing away from supporting or participating in such an  endeavor. The U.S.’s staunchest ally, the U.K., saw its parliament late  Thursday vote down U.K. use of force against the Syrian regime. Now, the U.S.  must decide if it will go it alone on a military operation against Syria and  risk the resulting consequences, or back off its threats and risk another set  of consequences for doing nothing. This has the world market place a bit calmer  than earlier this week, which in turn has put downside price pressure on  safe-haven assets like gold and U.S. Treasuries.

There was a fresh batch of  European Union economic data released overnight, most of which was upbeat. The  number of unemployed in the Euro zone in July fell for the second month in a  row. However, the overall unemployment rate in the region was still an all-time  high of 12.1%. Meantime Euro zone consumer inflation fell to 1.3% in August  from 1.6% in July, on an annual basis. Next week comes a slew of bond issuances  from European Union countries. Those auctions will be closely scrutinized for  investor demand.

The long U.S. Labor Day  holiday weekend is approaching, so trading volumes in many markets Friday are  likely to be light. Friday is the last trading day of the month, too. However,  once U.S. traders come back to work next Tuesday they will have a full plate of  matters upon which to ponder. There is an FOMC meeting in September, at which  time many believe the U.S. Fed will decided to change its monetary policy. The  important U.S. jobs report is out on Friday, September 6. There is a Group of  20 nations meeting next week. The U.S. congress returns from its summer recess  in mid-September and will immediately have to deal with pressing budget  matters. And, it’s likely that President Obama early this fall will name a new  Federal Reserve chairman.

U.S. economic data due for  release Friday includes personal income and outlays, the ISM Chicago business  survey, and the University of Michigan consumer sentiment survey.

The  London A.M. gold fix is $1,392.75 versus the previous P.M. fixing of $1,407.75.

Technically,  December gold futures bulls still have the  overall near-term technical advantage. A two-month-old uptrend is in place on  the daily bar chart. The gold bulls’ next upside near-term price breakout  objective is to produce a close above solid technical resistance at $1,450.00.  Bears’ next near-term downside breakout price objective is closing prices below  solid technical support at $1,384.00. First resistance is seen at $1,400.00 and  then at the overnight high of $1,411.50. First support is seen at the overnight  low of $1,392.50 and then at $1,384.00.

September  silver futures bulls have the overall  near-term technical advantage. Bulls’ next upside price breakout objective is  closing prices above solid technical resistance at $26.00 an ounce. The next  downside price breakout objective for the bears is closing prices below solid technical  support at $23.605. First resistance is seen at the overnight high of $24.015  and then at Thursday’s high of $24.415. Next support is seen at the overnight  low of $23.445 and then at $23.00.

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