(Kitco News) - Comex February gold futures prices careened lower and hit a fresh nearly three-month low on follow-through selling pressure from the strong losses posted in afternoon trading Tuesday. It was a “risk-off” trading day in the market place Wednesday, and that was very bearish for the precious metals. A stronger U.S. dollar and sharply lower crude oil prices were also major bearish factors for gold Wednesday. Fresh, serious near-term technical damage has been inflicted in gold this week. February gold last traded down $76.80 at $1,586.60 an ounce. Spot gold last traded down $47.00 an ounce at $1,584.50. March Comex silver last traded down $2.365 at $28.89 an ounce.

Fresh developments on the European Union debt crisis scene include higher Italian bond yields Wednesday and some fresh, weak economic data coming from the EU. That pushed the Euro currency to a fresh 11-month low Wednesday, which in turn boosted the U.S. dollar index.

The U.S. dollar index traded higher Wednesday and hit a fresh 11-month high. The dollar index bulls have the solid overall near-term technical advantage, which is a major bearish underlying factor for the precious metals markets. Crude oil and many other commodity market prices were lower Wednesday morning, with crude sharply lower, which was also negative for the precious metals. 

The London P.M. gold fixing was $1,603.00 versus the previous P.M. fixing of $1,672.50.

Technically, February gold futures prices closed nearer the session low today. Much of the selling pressure in gold was panic and weak long liquidation. Gold prices did fall below their 200-day moving average today for the first time since 2009. Serious near-term chart damage has been inflicted. Prices are in an accelerating four-week-old downtrend on the daily bar chart. However, the longer-term price uptrend on the longer-term monthly chart remains in place. It would take a move in nearby gold futures below major psychological support at the $1,500.00 level to begin to dent longer-term technical strength in gold, and begin to suggest the longer-term price uptrend is ending. Bulls' next near-term upside technical breakout objective is to produce a close above solid technical resistance at Wednesday’s high of $1,645.80. Bears' next near-term downside price objective is closing prices below major technical support at the September low of $1,643.30. First resistance is seen at $1,600.00 and then at $1,625.50. First support is seen at Wednesday’s low of $1,565.70 and then at $1,550.00. Wyckoff's Market Rating: 3.5.

March silver futures prices closed nearer the session low Wednesday and hit a fresh 2.5-month low. Serious near-term technical damage was inflicted Wednesday. Silver prices have been trending lower in a choppy fashion for six weeks. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $31.00 an ounce. The next downside price breakout objective for the bears is closing prices below major technical support at the September low of $26.185. First resistance is seen at $29.50 and then at $30.00. Next support is seen at the October low of $28.50 and then at $28.00. Wyckoff's Market Rating: 3.5.

March N.Y. copper closed down 1,535 points 328.80 cents Wednesday. Prices closed nearer the session low and hit a fresh three-week low. The key “outside markets” were bearish for copper Wednesday, as the U.S. dollar index was firmer while crude oil prices were sharply lower. Copper bears have the overall near-term technical advantage and gained fresh downside momentum Wednesday. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 350.00 cents. The next downside price breakout objective for the bears is closing prices below major psychological support at 300.00 cents. First resistance is seen at 330.00 cents and then at 335.00 cents. First support is seen at Wednesday’s low of 325.65 cents and then at the November low of 321.85 cents. Wyckoff's Market Rating: 3.5.

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By Jim Wyckoff contributing to Kitco News; jim@jimwyckoff.com

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