Gold, Silver Prices Rally On Short Covering, Bargain Hunting

(Kitco News) - Goldand silver prices were ending the U.S. day session with solid gains Monday. Theprecious metals were supported by a weaker U.S. dollar index and a rebound incrude oil prices. Some short covering in the futures market and bargain huntingin the cash market were featured in both metals, following last week’s sellingpressure. Impressively, the metals were able to post good price gains despite abig rally in the U.S. stock market, as of this writing early Monday afternoon. April Comex gold futures were last up $10.10 an ounce at $1,325.80. March Comex silver was last up $0.406 at $16.545 an ounce.

Worldstock markets were also higher Monday, on a bounce from last week’s stronglosses. The big question still on traders’ minds to start the trading week isif the recent period of very high daily price volatility has ended. Priceaction early this week will go a long way in answering that question. Still,major chart damage has been inflicted on the U.S. stock indexes to suggestthose markets have topped out. Such a scenario is a bullish underlying elementfor the precious metals markets.

Thekey outside markets on Monday saw the U.S. dollar index weaker on a correctivepullback from recent good gains. However, there are early technical clues theUSDX has put in a near-term market bottom. Meantime, Nymex crude oil prices werefirmer on a corrective bounce from recent solid losses and on the rebound inworld stock markets. However, there are chart clues the oil market has toppedout for at least the near term.

Technically,Aprilgold futures prices closed the day session nearer the session high. Thegold bulls have the slight overall near-term technical advantage, but need toshow more power soon to keep it. Gold bulls' next upside near-term pricebreakout objective is to produce a close above solid technical resistance at$1,350.00. Bears' next near-term downside price breakout objective is pushingprices below solid technical support at $1,300.00. First resistance is seen attoday’s high of $1,330.00 and then at $1,335.00. First support is seen attoday’s low of $1,316.30 and then at last week’s low of $1,309.00. Wyckoff'sMarket Rating: 5.5

Marchsilver futures prices closed nearer the session high today. The silver bearsstill have the overall near-term technical advantage. Silver bulls' next upsideprice breakout objective is closing prices above solid technical resistance at$17.00 an ounce. The next downside price breakout objective for the bears isclosing prices below solid support at $16.00. First resistance is seen at$16.75 and then at last week’s high of $16.955. Next support is seen at today’slow of $16.28 and then at last week’s low of $16.19. Wyckoff's Market Rating:3.5.

March N.Y. copper closed up 520 points at 308.55 cents today. Prices closed nearerthe session high on short covering after hitting a seven-week low on Friday.The key “outside markets” were bullish for copper today as the U.S. dollarindex was lower and crude oil prices were higher. The copper bulls have theoverall near-term technical advantage. Copper bulls' next upside priceobjective is pushing and closing prices above solid technical resistance atlast week’s high of 325.75 cents. The next downside price objective for thebears is closing prices below solid technical support at 300.00 cents. Firstresistance is seen at 311.90 cents and then at 315.00 cents. First support is seenat today’s low of 304.25 cents and then at last week’s low of 302.60 cents.Wyckoff's Market Rating: 6.0.

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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