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(Kitco News) - Comex April gold futures prices ended the U.S. day session higher and near the daily high as bargain hunters stepped in to buy the early dip in prices. Prices hit a fresh two-month high today and bulls continue to build upon their upside near-term technical momentum. April gold last traded up $9.10 at $1,758.60 an ounce. Spot gold was last quoted up $12.80 an ounce at $1,756.25.  March Comex silver last traded up $0.348 at $34.155 an ounce.

Gold and silver both started their rallies right around the time of Thursday morning’s testimony by Fed Chairman Bernanke to the U.S. House of Representatives. While Bernanke said nothing really new or surprising, he reiterated the U.S.’s path to better economic times remains a tough one. It’s likely that gold rallied in part due to Bernanke’s general reaffirmation of last week’s FOMC statement that pledged continued low interest rates well into 2013 and hinted more quantitative easing could be forthcoming—which was bullish for the precious metals.

The U.S. dollar index was slightly higher Thursday on a short-covering bounce following recent selling pressure. The dollar index bears still have some downside near-term technical momentum. Crude oil prices traded sharply lower Thursday and hit a fresh six-week low of $95.44 a barrel. Crude oil bulls are fading and that did somewhat limit the upside for gold and silver Thursday. Crude oil and the U.S. dollar index will remain the two key “outside markets” that will have a daily influence on gold and silver price moves.

There were a few fresh developments coming out of the European Union debt crisis Thursday. A Spanish bond auction saw mixed results but with lower yields fetched.
A debt- restructuring deal between the Greek government and the private sector has still not been reached, but an agreement is closer, reports said. The EU debt crisis appears to have stabilized for the moment. But if recent history plays out again, the EU debt crisis will be back on the front burner of the market place.

The London P.M. gold fixing was $1,751.00 versus the previous P.M. fixing of $1,740.00.

Technically, April gold futures prices closed nearer the session high Thursday and hit a fresh two-month high. Gold managed gains despite bearish “outside markets” that saw a firmer U.S. dollar index and sharply lower crude oil prices. Yet, gold rallied anyway on its technical strength. Gold bulls have the solid overall near-term technical advantage and still have upside near-term technical momentum on their side. A steep five-week-old uptrend is in place on the daily bar chart. Bulls' next upside technical breakout objective is to produce a close above solid technical resistance at the December high of $1,769.70. Bears' next near-term downside price objective is closing prices below chart trend-line and psychological support at $1,700.00. First resistance is seen at Thursday’s high of $1,763.80 and then at $1,769.70. First support is seen at $1,750.00 and then at Thursday’s low of $1,743.30. Wyckoff's Market Rating: 8.0.

March silver futures prices closed nearer the session high Thursday and hit a fresh 2.5-month high. Silver also scored gains despite bearish “outside markets” that saw a firmer U.S. dollar index and sharply lower crude oil prices—showing its near-term technical strength. Silver bulls have the solid overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $35.68 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $32.93. First resistance is seen at Thursday’s high of $34.35 and then at $35.00. Next support is seen at $34.00 and then at Thursday’s low of $33.455. Wyckoff's Market Rating: 7.0.

March N.Y. copper closed down 535 points 378.85 cents Thursday. Prices closed nearer the session low. The key “outside markets” were in a bearish posture for copper Thursday, as the U.S. dollar index was firmer and crude oil prices were sharply lower. Copper bulls still have the near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above major psychological resistance at 400.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 367.50 cents. First resistance is seen at 380.00 cents and then at 385.00 cents. First support is seen at this week’s low of 376.30 cents and then at 375.00 cents. Wyckoff's Market Rating: 6.0.

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

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