Gold, Silver Bulls Bruised By Rebounding Greenback
(Kitco News) - Gold and silver prices were ending the U.S. day session weaker Tuesday. A solid bounce in the U.S. dollar index early this week is putting price pressure on the gold and silver markets. Some normal profit-taking and chart consolidation is also featured after gold prices hit a 3.5-month high last week. February Comex gold was last down $7.30 an ounce at $1,313.10. March Comex silver was last down $0.139 at $17.005 an ounce.
World stock markets were mostly firmer Tuesday, including U.S. stock indexes hitting new record highs, again. There continues to be little risk aversion in the world marketplace, at present, and that’s a negative element for the safe-haven gold and silver markets.
The key outside markets on Tuesday saw the U.S. dollar index higher on another corrective bounce from recent selling pressure. While the greenback bears still have the overall near-term technical advantage, the bulls are out of the shoot in good fashion so far this week.
Nymex crude oil prices were solidly higher and hit a three-year high of $62.97 a barrel Tuesday. Traders are waiting to see if the U.S. implements new economic sanctions against Iran, which could limit their oil exports. The recent rally in oil prices has been a positive development for the precious metals markets.
Important for the precious metals and other markets are recent prognostications from noted analysts that the long-term bull market runs in U.S. Treasuries are over. Longer-term technical damage has been inflicted on T-Bond and T-Note charts. This suggests rising interest rates and rising inflation. While the tighter monetary policy that generally comes with rising inflation has been bearish for the metals, per recent history, longer-term history actually shows that hard assets such as precious metals benefit from rising inflation. Times of problematic inflation see the investing public general opt for hard assets over paper assets. The next shoe to drop in this scenario of rising inflation will be a major top being put in the U.S. stock market. Veteran gold and silver market bulls are patiently (well, some maybe not so patiently) waiting.
Technically, February gold futures prices closed nearer the session low. The bulls still have the overall near-term technical advantage, amid a four-week-old uptrend in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,280.00. First resistance is seen at today’s high of $1,321.40 and then at last week’s high of $1,327.30. First support is seen at today’s low of $1,309.50 and then at the January low of $1,304.60. Wyckoff's Market Rating: 6.0
March silver futures prices closed nearer the session low on more profit taking after hitting a six-week high last week. The bulls still have the overall near-term technical advantage, but need to show fresh power soon to keep it. Prices are in a four-week-old uptrend on the daily bar chart, but now just barely. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the October high of $17.59 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the October low of $16.435. First resistance is seen at today’s high of $17.17 and then at last week’s high of $17.32. Next support is seen at today’s low of $16.945 and then at $16.75. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed down 30 points at 322.10 cents today. Prices closed nearer the session low today. The copper bulls still have the overall near-term technical advantage amid some recent, normal profit taking. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 335.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 310.00 cents. First resistance is seen at today’s high of 325.90 cents and then at 327.90 cents. First support is seen at today’s low of 321.25 cents and then at 320.00 cents. Wyckoff's Market Rating: 7.0.