Gold Rallies On Renewed Investor Demand, Weaker U.S. Dollar

(Kitco News) - Gold prices ended the U.S. day session with good gains Monday, with Comex futures closing at a four-week high close. A weaker U.S. dollar index on this day helped out the precious metals markets bulls. Also, reports said investor monies are again starting to flow into gold exchange traded funds (ETFs) as the year 2017 is just under way. February Comex gold was last up $10.30 an ounce at $1,183.70. March Comex silver was last up $0.171 at $16.69 an ounce.

The near-term technical postures for both gold and silver markets have improved markedly recently, to suggest those markets have put in at least near-term lows, if not major bottoms.

There were no significant, new fundamental developments in the marketplace to start the trading week, which made for quieter trading in many markets.

The key “outside markets” on Monday morning saw the U.S. dollar index trade lower. The greenback bulls still have the overall technical advantage despite some choppy trading action the past couple weeks. The other outside market saw Nymex crude oil prices solidly lower on increasing U.S. drilling rig counts levels and lingering doubts about OPEC’s ability to adhere to its announced reduced collective oil output.

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Technically, February gold futures prices closed nearer the session high and closed at a five-week high close today. The gold bears still have the overall near-term technical advantage. However, prices are in a three-week-old uptrend and there are now chart clues that a market bottom is in place. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,150.00. First resistance is seen at last week’s high of $1,185.90 and then at $1,190.00. First support is seen at today’s low of $1,172.20 and then at $1,163.30. Wyckoff's Market Rating: 3.5

March silver futures prices closed nearer the session high and closed at a four-week high close today. The silver market bears still have the overall near-term technical advantage. However, there are now early chart clues that a market bottom is in place. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the December low of $15.675. First resistance is seen at last week’s high of $16.76 and then at $17.00. Next support is seen at today’s low of $16.455 and then at $16.26. Wyckoff's Market Rating: 3.0.

March N.Y. copper closed down 40 points at 244.15 cents today. Prices closed nearer the session high today. The copper bulls have the slight overall near-term technical advantage amid recent choppy trading. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 265.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 235.00 cents. First resistance is seen at today’s high of 255.05 cents and then at last week’s high of 258.85 cents. First support is seen at 250.00 cents and then at the December low of 244.80 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com