Gold, Silver Hit Multi-Month Highs Amid Eroding U.S. Dollar

(Kitco News) - Gold prices ended the U.S. day session with modest gains Tuesday and scored afour-month high in overnight action. Meantime, silver prices were slightly upand hit a two-month high overnight. The precious metals markets are beingsupported by a plunging U.S. dollar index and a soaring Euro currency. February Comex gold was last up $2.40 an ounce at $1,337.40. March Comex silver was lastup $0.079 at $17.22 an ounce.

Thekey outside markets on Tuesday saw the U.S. dollar index lower and not farabove Monday’s 3.5-year low. The greenback bears have the solid overallnear-term technical advantage, to suggest more pressure in the near term. TheEuro currency is being boosted by mostly upbeat economic data coming out of theEuropean Union and on ideas the European Central Bank will begin to reel in itsheretofore very loose monetary policy.

Meantime,Nymex crude oil prices were weaker on some mild profit taking Tuesday afterhitting a three-year high of $64.89 a barrel overnight. The recent rally in oilprices has been a bullish development for the raw commodity sector, includingthe precious metals.

U.S.data due for release Tuesday was light. However, the report pace picks up onWednesday.

Worldstock markets were mostly higher Tuesday, boosted by increasing optimism onglobal economic growth. Along with that specter come tighter monetary policiesfrom the world’s major central banks. U.S. stock indexes hit new record highsagain today. The ability of safe-haven gold to rally when its competing assetclass of equities is seeing record highs is impressive for the yellow metal.

Bitcoinprices plunged again today and hit a four-week low. The eroding crypto currencyis also working in favor of the gold market, even if only from a psychologicalperspective.

Technically,Februarygold futures prices closed nearer the session low today. The bullshave the firm overall near-term technical advantage, amid a five-week-olduptrend in place on the daily bar chart. Gold bulls' next upside near-termprice breakout objective is to produce a close above solid technical resistanceat the September high of $1,365.80. Bears' next near-term downside pricebreakout objective is pushing prices below solid technical support at$1,300.00. First resistance is seen at today’s high of $1,345.00 and then at$1,350.00. First support is seen at today’s low of $1,332.10 and then at the $1,325.00.Wyckoff's Market Rating: 6.5

Marchsilver futures prices closed nearer the session high today. Prices also scoreda bullish “outside day” up on the daily bar chart. The bulls have the overallnear-term technical advantage. Prices are in a five-week-old uptrend on thedaily bar chart. Silver bulls' next upside price breakout objective is closingprices above solid technical resistance at the October high of $17.59 an ounce.The next 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 $17.45 and then at $17.59. Next support is seen at $17.00 andthen at today’s low of $16.80. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed down 5 points at 321.80 cents today. Prices closed nearerthe session low and hit a three-week low today. The copper bulls still have theoverall near-term technical advantage. Copper bulls' next upside priceobjective is pushing and closing prices above solid technical resistance at theDecember high if 332.20 cents. The next downside price objective for the bearsis closing prices below solid technical support at 310.00 cents. Firstresistance is seen at 325.00 cents and then at 327.45 cents. First support isseen at today’s low of 318.35 cents and then at 315.00 cents. Wyckoff's MarketRating: 6.5.

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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