Gold Erases Early Losses, Ends Near Steady

(Kitco News) - Tuesday’s trading was a victory for the gold market bulls. Prices started out the day under pressure from a stronger U.S. dollar and worries about a U.S. interest rate hike coming in March. However, as the session progressed traders decided to step in to “by the dip” despite the stronger greenback and new record highs in the U.S. stock indexes. April Comex gold was last down $0.50 an ounce at $1,238.60. March Comex silver was last down $0.005 at $18.025 an ounce.

Gold prices sold off overnight in part due to hawkish comments from Federal Reserve Bank of Philadelphia President Patrick Harper, who said Monday that he could support a U.S. interest rate increase at the next FOMC meeting in March, if inflationary pressures are apparent.

There are several Federal Reserve officials slated to speak this week, and the latest FOMC minutes are due for release in the early afternoon Wednesday. Increasing notions of a U.S. interest rate rise occurring sooner rather than later have pushed U.S. and world bond market yields higher early this week.

The key “outside markets” on Tuesday saw the U.S. dollar index trade solidly higher. The greenback bulls have the overall near-term technical advantage amid a fledgling price uptrend on the daily chart. Meantime, Nymex crude oil futures prices were higher Tuesday morning and hit a six-week high overnight. Oil prices might be seeing a bullish upside “breakout” from the recent sideways trading range that had bound the market for weeks.

Technically, April gold futures prices closed nearer the session high. The gold bulls have the overall near-term technical advantage. Prices are still 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 $1,275.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,210.00. First resistance is seen at the February high of $1,246.60 and then at $1,250.00. First support is seen at today’s low of $1,226.80 and then at $1,220.00. Wyckoff's Market Rating: 6.0

March silver futures prices closed nearer the session high today. The silver market bulls have the overall near-term technical advantage. Prices are in a two-month-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 last week’s high of $18.14 and then at $18.25. Next support is seen at today’s low of $17.815 and then at this week’s low of $17.73. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed up 400 points at 274.75 cents today. Prices closed nearer the session high. The copper bulls have the firm 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 today’s high of 275.85 cents and then at the February high of 282.30 cents. First support is seen at today’s low of 270.00 and then at last week’s low of 267.80 cents. Wyckoff's Market Rating: 7.0.

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