Comex Gold Ends Higher on Technical

Kitco News) -Comex February gold futures prices ended the U.S. day session moderately higher Wednesday, hitting a fresh four-week high. Fresh safe-haven buying interest was featured. Prices also Wednesday pushed above near-term chart resistance to provide the bulls with fresh upside near-term technical momentum. The fact gold scored gains Wednesday despite the key “outside markets” being in a bearish posture for gold (higher U.S. dollar index and weaker crude oil prices) is also encouraging to the gold bulls. February gold last traded up $9.30 at $1,640.80 an ounce. Spot gold was last quoted up $7.70 an ounce at $1,640.50. March Comex silver last traded up $0.12 at $29.935 an ounce.

There are also reports this week of better physical demand for gold, especially from Asian countries, as the new year gets under way.

The U.S. dollar index traded solidly higher Wednesday and hit a fresh 16-month high, yet gold scored gains anyway. The dollar index bulls still have the solid overall near-term technical advantage. With traders focusing more on gold as a safe-haven store of value, they will pay less attention to the value of the U.S. dollar on a day-to-day basis.

Crude oil prices traded modestly lower Wednesday, but are still trading above $100.00 a barrel. Crude oil will remain an important “outside market” factor for the precious metals.

There have been no major, fresh developments coming out of the European Union debt crisis recently. There is another EU summit scheduled for January 30, reports said Wednesday. If recent history continues to play out it won’t be too long until the EU debt crisis is back on the front burner of the market place, which could further boost gold on better safe-haven investment demand. Italian bond yields are still very high, which is a warning signal the EU debt crisis could escalate at any time.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com