Gold Sees Tepid Bounce From Tuesday's Beatdown

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(Kitco News) - Gold prices areslightly higher in early morning U.S. trading Wednesday, on a minor upsidecorrection following the solid losses on Tuesday. Buying interest in the metalsis limited as the U.S. dollar index hit a three-week high overnight. April Comex gold futures were last up $1.30 an ounce at $1,320.00. May Comex silver was last up $0.001 at $16.435 an ounce.

Worldstock markets were mixed to weaker overnight. U.S. stock indexes are pointed toslightly higher openings when the New York day session begins.

Themarket place has pretty much digested new Fed Chairman Jerome Powell'stestimony to U.S. lawmakers Tuesday, in which he sounded a more hawkish tone onU.S. monetary policy. Powell intimated there could be four small U.S. ratehikes this year, beginning in March. His comments pressured the metals markets,U.S. Treasuries and the stock market, while supporting the U.S. dollar index.

Inovernight news, the Euro zone February consumer price index was reported at up1.2% from January's up 1.3%, year-on-year. The February number was in line withmarket expectations and is the third month in a row of declining inflation inthe Euro zone.

Thekey outside markets on Wednesday morning see the U.S. dollar index trading modestlyhigher. There are some early chart clues the USDX has put in a near-termbottom. Meantime, Nymex crude oil prices are slightly weaker and trading justbelow $63.00 a barrel. Growing U.S. oil production the past few months is amajor factor that is likely to cap oil price advances.

U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, the second estimate of fourth-quarter GDP, the ISM Chicagobusiness survey, pending home sales and the weekly DOE liquid energy stocksreport.

Technically,April gold futures bulls have the slight overall near-term technical advantage,but are fading. 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 $1,300.00. First resistance is seen at $1,325.00 and thenat $1,330.00. First support is seen at this week's low of $1,314.40 and then atthe February low of $1,309.00. Wyckoff's Market Rating: 5.5

Maysilver futures bears have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at the February high of $17.04 an ounce. The next downsideprice breakout objective for the bears is closing prices below solid support at$16.00. First resistance is seen at $16.50 and then at this week's high of $16.785.Next support is seen at this week's low of $16.34 and then at the February lowof $16.21. Wyckoff's Market Rating: 4.0.

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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