gold comin through, page-34

Gold Posting Solid Gains; New Record High Within Striking Distance

By Jim Wyckoff
11 May 2010, 8:18 a.m.

Comex gold futures prices are solidly higher in early trading Tuesday and notched another fresh five-month high overnight. The precious yellow metal is now within easy striking distance of pushing above the all-time high of $1,227.50 an ounce, scored in December of 2009. June Comex gold last traded up $17.50 at $1,218.30.

After a one-day respite following weekend news of a massive 750 billion Euro financial aid package for debt-distressed European Union countries, stock markets and the Euro currency are once again seeing selling pressure that is spilling over into other non-safe-haven asset markets, such as crude oil and the other European currencies.

The key question posed in this report Monday was: Will this latest, and most extensive, pronouncement from the EU finally put to rest the European sovereign debt issue, from a worldwide investor and markets perspective? Tuesday, the answer to that question is leaning toward the "no" camp. Look for gold prices to continue to rally if the European Union debt situation remains very uncertain in the eyes of investors worldwide.

In overnight news, holdings in the largest gold exchange traded fund (ETF), SPDR Gold Shares, hit a record high this week--up 33 tons from a week ago.

The London A.M. gold fix was $1,209.00 versus the previous P.M. fixing of $1,196.50.

Technically, June Comex gold futures bulls have the overall near-term and longer-term technical advantage, and have gained fresh upside momentum Tuesday morning. The next major upside technical objective for the bulls is pushing and closing prices above strong technical resistance at the all-time high of $1,227.50 an ounce, basis nearby Comex futures. Look for bigger price moves in gold, on a daily basis, if a new all-time record high is scored.
Gold prices are still in a three-month-old uptrend on the daily bar chart. For June gold, shorter-term technical resistance is seen at $1,220.00 and then at $1,227.50. Buy stops likely reside just above those levels, with heavy buy stop orders likely placed above the record high. Sell stops likely reside just below shorter-term support at $1,200.00 and then at this week's low of $1,184.40. Today's key near-term Fibonacci pivot level for June gold: $1,195.00.

See at the bottom of the daily chart for June gold that the Directional Movement Index (DMI) has a green ADX line reading of 25.25. The ADX line is presently trending higher, which suggests the price trend in gold at present (which is up) is getting stronger. If the ADX line of the DMI moves above 30, that would suggest a very powerful price trend is occurring in June gold futures, which would also suggest bigger daily price moves.

Comex silver futures are trading near unchanged in quieter trading early Tuesday. The stronger U.S. dollar, lower crude oil and U.S. stock index futures prices are bearish "outside markets" that are limiting buying interest in silver Tuesday. July silver last traded up 1.3 cents an ounce at $18.565. Silver bulls do still have the overall near-term technical advantage. July silver finds shorter-term technical resistance at $18.69 and then at the May high of $18.89. Buy stops likely reside just above those levels. Shorter-term technical support for July silver is located at the overnight low of $18.405 and then at Monday's low of $18.215. Sell stops are likely placed just below those levels. Today's key Fibonacci pivot level for July silver futures is located at $18.21.




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