Gold, Silver Pressured By "Dead-Cat Bounce" in U.S. Equities

(Kitco News) - Gold and silver markets were ending the U.S. day session moderately lower, with gold hitting a three-week low and silver futures closing at a six-week low close. A big recovery in the U.S. stock market Tuesday, after Monday’s major beat-down, worked to push the metals markets down. Losses in the gold and silver markets were limited, however, when the U.S. dollar index could not hold its good early gains seen right after the U.S. markets opened. April Comex gold futures were last down $5.10 an ounce at $1,331.40. March Comex silver was last down $0.091 at $16.58 an ounce.

World stock markets tumbled sharply Tuesday, following the strong losses in the U.S. stock indexes Monday. U.S. stocks opened sharply lower but quickly rebounded to score solid gains. Still, the gains seen as of this writing Tuesday afternoon do not repair the major chart damage seen the past few days in the major U.S. stock indexes. That technical damage still suggests more downside pressure is coming. Today’s gains in the U.S. stock market could be just a so-called “dead-cat bounce.” Don’t be surprised if more selling pressure in the stock market occurs yet this week. And if that’s the case, safe-haven gold and silver markets will benefit. I would be very surprised if the steep downdraft we saw in stocks on Friday and Monday can just be swept under the rug by the bulls.

Somewhat ironically, world bond markets yields fell Tuesday on some safe-haven demand from the steep downdraft in world stock markets. Still, don’t look for the world bond markets to make a sustainable recovery in prices.

The key “outside markets” on Tuesday afternoon saw the U.S. dollar index near steady and giving back good early gains. Meantime, Nymex crude oil prices were lower and trading above $63.00 a barrel. The very shaky world equity markets have prompted some selling pressure in the crude oil markets recently.

Technically, April gold futures prices closed the day session nearer the session low, hit a three-week low and scored a bearish “outside day” down on the daily bar chart. The gold bulls still have the overall near-term technical advantage. No serious near-term chart damage has occurred yet. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the January high of $1,370.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at $1,340.00 and then at $1,350.00. First support is seen at today’s low of $1,328.40 and then at $1,325.00. Wyckoff's Market Rating: 6.0

March silver futures prices closed nearer the session low today and closed at a six-week-low close today. The silver bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the January high of $17.705 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $16.75 and then at today’s high of $16.955. Next support is seen at this week’s low of $16.51 and then at $16.25. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed up 15 points at 319.15 cents today. Prices closed near mid-range. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the December high of 332.20 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 310.80 cents. First resistance is seen at today’s high of 321.95 cents and then at this week’s high of 325.75 cents. First support is seen at today’s low of 316.00 cents and then at last week’s low of 315.20 cents. Wyckoff's Market Rating: 6.5.