Gold Gains On Safe-Haven Demand, Weaker USDX

(Kitco News) - Gold prices ended the U.S. session higher and hit a nearly four-month highWednesday. Safe-haven demand for the yellow metal was featured amid a rise inworld government bond yields that troubled the marketplace. A lower U.S. dollar index on this day also provided support to the precious metals. February Comex gold was last up $5.60 an ounce at $1,319.40. March Comex silver was last up$0.025 at $17.035 an ounce.

Afeature in the marketplace Wednesday was rising world government bond yields(falling prices). This helped to pressure global stock markets.

Bloombergnews published a story Wednesday about the Chinese government possiblyre-evaluating and reducing its purchases of U.S. Treasury securities. China isa massive holder of U.S. Treasuries.

Therehave been recent proclamations from some veteran financial market analysts thatthe long-term bull market runs in U.S. Treasuries are over. Longer-termtechnical damage has been inflicted on T-Bond and T-Note charts. This suggestsrising interest rates and rising inflation. While the tighter monetary policiesthat generally come with rising inflation have been bearish for the commoditymarkets, per recent history, longer-term history actually shows that hardassets benefit from rising inflation. Times of problematic inflation see theinvesting public generally opt for hard assets over paper assets. The next shoeto drop in this scenario of rising inflation will be a major top being put inthe U.S. stock market.

Anauction of German government bonds Wednesday saw the highest yields fetchedsince last July, amid weak investor demand.

Thekey outside markets on Wednesday saw the U.S. dollar index lower on a pullbackfrom this week’s gains. The greenback bears have the overall near-termtechnical advantage.

Meantime,Nymex crude oil prices were higher and hit another three-year high of $63.67 abarrel. Traders are waiting to see if the U.S. implements new economic sanctionsagainst Iran, which could limit their oil exports. The recent rally in oilprices has been a positive development for the raw commodity sector, includingthe precious metals.

Technically,February gold futures prices closed near mid-range today. Prices also scored abullish “outside day” up on the daily bar chart. The bulls have the overallnear-term technical advantage, amid a four-week-old uptrend in place on thedaily bar chart. Gold bulls' next upside near-term price breakout objective isto produce a close above solid technical resistance at $1,350.00. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at $1,280.00. First resistance is seen at today’s high of$1,328.50 and then at $1,335.00. First support is seen at today’s low of$1,308.90 and then at the January low of $1,304.60. Wyckoff's Market Rating:6.0

March silver futures prices closed nearer the session low. The bulls have the overallnear-term technical advantage, but need to show fresh power soon to keep it.Prices are in a four-week-old uptrend on the daily bar chart, but now justbarely. Silver bulls' next upside price breakout objective is closing pricesabove solid technical resistance at the October high of $17.59 an ounce. Thenext downside price breakout objective for the bears is closing prices belowsolid support at the October low of $16.435. First resistance is seen attoday’s high of $17.22 and then at last week’s high of $17.32. Next support isseen at today’s low of $16.93 and then at $16.75. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed up 210 points at 323.70 cents today. Prices closed nearmid-range today. The copper bulls have the overall near-term technical advantageamid some recent, normal profit taking. Copper bulls' next upside priceobjective is pushing and closing prices above solid technical resistance at335.00 cents. The next downside price objective for the bears is closing pricesbelow solid technical support at 310.00 cents. First resistance is seen attoday’s high of 327.45 cents and then at 330.00 cents. First support is seen atthis week’s low of 321.25 cents and then at 320.00 cents. Wyckoff's MarketRating: 7.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Crypto market size continues to catch up with gold

Crypto stealing some of gold's thunder

Gold stocks drop on metal price decline

US a major market for Canadian mineral exports

Gold stocks down along with broad equities decline