Gold Slightly Lower As Greenback Rallies On More Hawkish Yellen

(Kitco News) - Gold prices were ending the U.S. say session slightly down Tuesday, pressured by a stronger U.S. dollar index that was supported by hawkish comments from Federal Reserve Chair Janet Yellen. Meantime, silver prices were slightly higher and scored another three-month high today. April Comex gold was last down $1.10 an ounce at $1,224.70. March Comex silver was last up $0.049 at $17.87 an ounce.

Yellen said in testimony to the U.S. Senate Tuesday that any new fiscal policy changes from the new administration of U.S. President Donald Trump could alter the course of U.S. monetary policy. However, she said it's too early to make determinations on what will occur on that front. Yellen also said that while the Fed's monetary policy remains "accommodative," she expects the Fed to raise interest rates at some point, saying waiting too long to tighten U.S. monetary policy would be unwise. The Fed chair also said in her prepared text that the U.S. economy is growing at a moderate pace, and she expects the global economies to also pick up steam over time.

The marketplace deemed Yellen's remarks as a bit hawkish on U.S. monetary policy. Now, a rate hike in March is more likely, when many had reckoned such would not be the case. Gold prices lost most of their early gains, while U.S. Treasury yields up-ticked, right after her prepared remarks were released. The U.S. dollar index also moved higher after Yellen's comments. The Fed chief’s remarks to the Senate were part of her two-day appearances before the U.S. Congress as part of the semiannual Humphrey-Hawkins report to the Congress.

Earlier in the session, some safe-haven demand for gold surfaced following the surprise resignation late Monday night of President Trump’s national security advisor, Mike Flynn. He made contradictory statements about his contacts with Russia, which reports said could have made him susceptible to blackmail by the Russians.

Technically, April gold futures prices closed nearer the session low. The gold bulls still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at today’s high of $1,236.00 and then at last week’s high of $1,246.60. First support is seen at this week’s low of $1,220.30 and then at $1,210.00. Wyckoff's Market Rating: 6.0

March silver futures prices closed nearer the session low but did hit another three-month high today. The silver market bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $18.09 and then at $18.25. Next support is seen at today’s low of $17.73 and then at $17.545. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed down 440 points at 273.95 cents today. Prices closed nearer the session low on profit taking after hitting a 21-month high on Monday. The copper bulls still have the solid overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 290.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 260.00 cents. First resistance is seen at this week’s high of 282.30 cents and then at 285.00 cents. First support is seen at today’s low of 271.35 and then at 270.00 cents. Wyckoff's Market Rating: 7.5.

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