Gold Prices Soar $25 On Technical Buying, Sinking U.S. Dollar

(Kitco News) - Goldprices ended the U.S. day session sharply up and hit a two-week high Wednesday.A slumping U.S. dollar index this week and chart-based buying were featured.Buy stop order were triggered in the gold and silver futures markets whennear-term technical resistance levels were breached. April Comex gold futureswere last up $27.00 an ounce at $1,357.40. March Comex silver was last up $0.367at $16.895 an ounce.

Avolatile day in the U.S. stock market also helped to lift safe-haven gold.

Thebig U.S. economic report of the week on Wednesday saw the consumer price indexreport come in hotter than expected. CPI for January came in at up 0.5% fromDecember and up 2.1%, year-on-year. The closely watched “core” rate (minus foodand energy prices) came in at up 0.3% from December and up 1.8%, year-on-year.The consensus forecasts for CPI were at up 0.4% from December and up 1.9%year-on-year. The core inflation rate was seen coming in at up 0.2% fromDecember and up 1.7%, year-on-year.

TheCPI report falls into the camp of the U.S. monetary policy hawks, who wouldlike to see the Federal Reserve raise interest rates at a faster pace: likelyfour small increases in 2018.

Goldprices initially sold off on the CPI data. However, when the stock market soldoff and became volatile the gold market quickly moved higher. It could also bethat on second-thought the market place did not deem the CPI report asindicating problematic inflation is on the horizon.

Adownbeat U.S. retail sales report on Wednesday also helped to rally the goldand silver markets. That report favored the U.S. monetary policy doves.

Theother outside market on Wednesday saw Nymex crude oil prices higher. Still, thebig increase in U.S. shale oil production is likely to limit the upside in oilmarkets in the coming weeks.

Technically,Aprilgold futures prices closed the day session near the session high andscored a big and bullish “outside day” up on the daily bar chart. The goldbulls have the overall near-term technical advantage and gained more powertoday. A three-week-old downtrend on the daily bar chart was soundly negatedtoday. Gold bulls' next upside near-term price breakout objective is to producea close above solid technical resistance at the January high of $1,370.50.Bears' next near-term downside price breakout objective is pushing prices belowsolid technical support at $1,320.00. First resistance is seen at $1,360.00 andthen at $1,370.50. First support is seen at $1,350.00 and then at $1,340.00.Wyckoff's Market Rating: 7.0

Marchsilver futures prices closed near the session high and scored a big and bullish“outside day” up on the daily bar chart. The silver bears still have the slightoverall near-term technical advantage. Silver bulls' next upside price breakoutobjective is closing prices above solid technical resistance at $17.00 anounce. The next downside price breakout objective for the bears is closingprices below solid support at $16.00. First resistance is seen at $17.00 andthen at $17.25. Next support is seen at $16.75 and then at $16.50. Wyckoff'sMarket Rating: 4.5.

March N.Y. copper closed up 705 points at 323.35 cents today. Prices closed near thesession high on heavy short covering and bargain hunting. The copper bulls havethe overall near-term technical advantage and gained more power today. Copperbulls' next upside price objective is pushing and closing prices above solidtechnical resistance at the December high of 323.65 cents. The next downsideprice objective for the bears is closing prices below solid technical supportat the February low of 302.60 cents. First resistance is seen at 325.75 centsand then at 327.90 cents. First support is seen at 320.00 cents and then at315.00 cents. Wyckoff's Market Rating: 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.

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