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

(Kitco News) - Gold andsilver markets were ending the U.S. day session moderately lower, with goldhitting a three-week low and silver futures closing at a six-week low close. Abig 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 marketswere limited, however, when the U.S. dollar index could not hold its good earlygains seen right after the U.S. markets opened. April Comex gold futures werelast down $5.10 an ounce at $1,331.40. March Comex silver was last down $0.091at $16.58 an ounce.

Worldstock markets tumbled sharply Tuesday, following the strong losses in the U.S.stock indexes Monday. U.S. stocks opened sharply lower but quickly rebounded toscore solid gains. Still, the gains seen as of this writing Tuesday afternoondo 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 iscoming. 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 marketoccurs yet this week. And if that’s the case, safe-haven gold and silvermarkets will benefit. I would be very surprised if the steep downdraft we sawin stocks on Friday and Monday can just be swept under the rug by the bulls.

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

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

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

Marchsilver futures prices closed nearer the session low today and closed at asix-week-low close today. The silver bears have the overall near-term technicaladvantage. Silver bulls' next upside price breakout objective is closing pricesabove solid technical resistance at the January high of $17.705 an ounce. Thenext downside price breakout objective for the bears is closing prices belowsolid support at $16.00. First resistance is seen at $16.75 and then at today’shigh 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 nearmid-range. The copper bulls have the overall near-term technical advantage.Copper bulls' next upside price objective is pushing and closing prices abovesolid technical resistance at the December high of 332.20 cents. The nextdownside price objective for the bears is closing prices below solid technicalsupport at the January low of 310.80 cents. First resistance is seen at today’shigh of 321.95 cents and then at this week’s high of 325.75 cents. Firstsupport is seen at today’s low of 316.00 cents and then at last week’s low of315.20 cents. Wyckoff's Market Rating: 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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