Estonia will become the 17th member of the Euro zone tomorrow. A private survey of UK Housing Prices during December was up 0.4% year-on-year, higher than estimates. The only US economic number to be released this morning will be a private survey of NY Purchasing Managers, released at 7:30 AM.
GOLD MARKET FUNDAMENTALS:
February gold comes into the last trading day of 2010 sitting within $3 of this week's high and within $20 of the contract highs. Not surprisingly, the gold market seems to have mostly discounted news of a softer December Indian gold import tally of 20 to 25 tons, but the trade was expecting a decline in that figure, because high flat prices of gold were expected to discourage some Indian gold buyers.
The fact that December 2010 Indian gold imports might have been as much as 19 tons below the 2009 level doesn't seem to be weighing that heavily on gold prices this morning, as the trade continues to give investment demand the dominating role in the marketplace. The gold market might pay some attention to the New York ISM figures today, as stronger than expected US data yesterday seemed to temporarily undermine the gold market, even though the Dollar yesterday generally remained weak in the wake of the data flows. More than likely the Press will be rife with stories on the stellar annual performance of gold and while that might provide the bulls with ongoing confidence, some traders could come away from that news worried about an overbought technical condition.
Comex Gold Stocks were pegged at 11.643 million ounces up 16,861 ounces. Stocks have declined 12 of the last 20 days. One can hardly argue with the upward bias into the last trading session of the year, especially since many markets appeared to correct or balance some of their overbought technical status with the Thursday action. A bull/bear pivot point on the charts is seen at $1,414.90 and a trade above that level early today, could prompt a push toward the $1,425 level in the February gold contract. However, we suspect that scheduled data will prompt a bit of a minor setback early this morning, but that the market is likely to maintain a bullish tilt for the rest of the trading session. In the end, the direction of the Dollar looks to be a major influence on gold prices today. We think fresh money is on the sidelines for early next year and therefore some uyers might be inclined to lead off a little ahead of the calendar change.
SILVER MARKET FUNDAMENTALS :
The March silver market sits just below the recent contract highs in the early Friday morning trade. With a weaker Dollar early and a lack of definitive direction in global equity markets, the bull camp is probably capable of maintaining its edge, especially if market conditions are thin. While gold seemed to be undermined by better than expected scheduled data yesterday, the silver market has been firming up its correlation with copper and industrial metals markets recently and that could mean that favorable US data today could lend support to silver prices. Not surprisingly, the silver market continues to get mostly favorable press coverage overnight, with even more coverage suggesting that silver appears to be a cheaper in play than gold.
Comex Silver Stocks were 104.707 million ounces up 835,527 ounces. Silver stocks have declined 13 of the last 20 days. A pattern of higher lows and ongoing bullish press coverage leaves the bull camp in control in silver. Some players think that silver is destined to finish the year out on a very strong note, while others think that silver will simply grind slowly higher again today. We think that silver needs a weaker Dollar, decent economic readings and higher equities to range up into new contract high ground. Critical support is seen just below the early market at $30.63, with little in the way of resistance seen until the old high of $30.93. If the market tests $30.93 on the last trading day of the year, it might manage at least a temporary rise above the even number $31.00.
METALS TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.
COMEX GOLD (FEB) 12/31/2010: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The close above the 9-day moving average is a positive short- term indicator for trend. The market could take on a defensive posture with the daily closing price reversal down. The market setup is somewhat negative with the close under the 1st swing support. The next upside objective is 1419.1. The next area of resistance is around 1411.0 and 1419.1, while 1st support hits today at 1399.2 and below there at 1395.4.
COMEX SILVER (MAR) 12/31/2010: A new contract high was made on the rally. Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was under the swing pivot. The near-term upside objective is at 3113.5. The next area of resistance is around 3077.0 and 3113.5, while 1st support hits today at 3020.0 and below there at 2999.5. For the latest updates PRESS CTR + D or visit Stock Market news Today
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