Gold Posts Modest Gains Amid Heightened Geopolitical Tensions

P.M. Kitco Roundup:

                  Gold prices ended the U.S. day session modestly higher Monday as heightened geopolitical tensions keep a safe-haven bid in the market. August Comex gold was last up $3.80 at $1,313.20 an ounce. Spot gold was last quoted up $1.80 at $1,313.25. December Comex silver last traded up $0.126 at $21.070 an ounce.

Geopolitics remained on the front burner of the market place to start this week. Last week’s downing of a Malaysian airliner on the Russia-Ukraine border and Israel’s ground offensive against Hamas on the Gaza strip are the dominant fundamentals in the markets Monday morning. The U.S. has accused Russian separatists of shooting down the Malaysian passenger jet. After some initial trepidation European leaders have condemned Russia and its president, Vladimir Putin. Meantime, Israel continues to try to root out Hamas and its missile launchers on the Gaza strip. So far, the Israel-Hamas conflict has not spread to unrest in other Middle Eastern regions. However, these two major geopolitical matters are flashpoints for the markets and are likely to significantly influence trading and markets for at least the near term. My sense is that it’s presently a 50-50 chance that these two geopolitical matters have peaked as far as influencing markets.

Gold, U.S. Treasuries and the U.S. dollar are safe-haven assets that have seen support from the heightened world tensions. Surprising to many is the fact that U.S. stock indexes have been resilient during the geopolitical unrest. The three major U.S. stock indexes showed solid gains Friday and are not far below their recent record or multi-year highs.

U.S. economic data due for release Monday was light and included the Chicago Fed national activity index. The data was not a markets-mover.

The London P.M. gold fix was $1,311.50 versus the previous A.M. fixing of $1,312.75.

Technically, August gold futures prices closed near mid-range Monday. Gold bulls and bears are on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the July high of $1,346.80. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the July low of $1,292.60. First resistance is seen at Monday’s high of $1,319.00 and then at $1,325.90. First support is seen at Monday’s low of $1,307.90 and then at $1,300.00. Wyckoff’s Market Rating: 5.0

December silver futures prices closed near mid-range Monday. The bulls have the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.67 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of $20.70. First resistance is seen at Monday’s high of $21.21 and then at $21.37. Next support is seen at Monday’s low of $20.95 and then at $20.84. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 150 points at 320.75 cents Monday. Prices closed near the session high on short covering. Copper have lost their near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 325.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 316.50 cents. First resistance is seen at Monday’s high of 321.10 cents and then at 322.50 cents. First support is seen at Monday’s low of 318.20 cents and then at last week’s low of 317.55 cents. Wyckoff's Market Rating: 5.0. - Kitco