Gold prices ended the U.S. day session solidly higher and hit a two-week high Thursday. A drop in the U.S. dollar index on this day prompted good short covering in the futures market and some bargain hunting in the cash market. If there is decent follow-through buying interest and a technically bullish weekly high close on Friday, such would be an early chart clue that the gold market has put in at least a near-term low, if not a major low. February Comex gold was last up $16.30 an ounce at $1,157.20. March Comex silver was last up $0.162 at $16.20 an ounce.
A weaker dollar helped gold extend gains into the final trading session of the year on Friday, leaving it on track to mark its first annual gain in four years.
Spot gold XAU= hit its highest in more than two weeks and was up 0.3 percent at $1,161.93 an ounce by 0103 GMT. The metal rose over one percent in the previous session, its biggest daily percentage gain since late September.
Gold has risen over 9 percent so far this year despite an 8 percent drop in November, snapping a three-year losing streak.
GOLD TECHNICAL ANALYSIS – Gold prices are poised to clear resistance at 1149.85, the 14.6% Fibonacci retracement, opening the door for a test of the 23.6% level at 1166.51.
Technically, February gold futures prices closed near the session high and hit a two-week high today. Follow-through buying on Friday and a bullish weekly high close would suggest at least near-term bottom, if not a longer-term bottom being in place. The gold bears still have the firm overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,180.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,124.30. First resistance is seen at today’s high of $1,160.60 and then at $1,170.00. First support is seen at $1,150.00 and then at today’s low of $1,142.60. Wyckoff's Market Rating: 3.0
Reference: Reuters, Kitco, Daily FX
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