Gold, Silver Prices Retreat Amid Rebound In U.S. Dollar

(Kitco News) - Gold and silver prices are weaker in early U.S. trading Tuesday. A rebound in theU.S. dollar index early this week is providing downside price pressure on thegold and silver markets. Some normal profit-taking and chart consolidation arealso featured after gold prices hit a 3.5-month high last week. February Comex gold was last down $5.50 an ounce at $1,314.90. March Comex silver was last down$0.094 at $17.05 an ounce.

Worldstock markets were mostly firmer in overnight dealings. U.S. stock indexes arepointed toward firmer openings when the New York day session begins. The U.S.indexes poked to new record highs again overnight. There continues to be littlerisk aversion in the world marketplace, at present, and that's a negativeelement for the safe-haven gold and silver markets.

Thekey outside markets on Tuesday morning see the U.S. dollar index higher on anothercorrective bounce from recent selling pressure. While the greenback bears stillhave the overall near-term technical advantage, the bulls are out of the shootin good fashion so far this week.

Meantime,Nymex crude oil prices are firmer and hit a three-year high of $62.56 a barrelovernight. Traders are waiting to see if the U.S. implements new economicsanctions against Iran, which could limit their oil exports. The recent rallyin oil prices has been a positive development for the precious metals markets.

U.S.economic data due for release Tuesday includes the weekly Johnson Redbook andGoldman Sachs retail sales reports, the NFIB small business index, the IDB/TIPPeconomic optimism index, and the World Bank's global economic prospects report.

Technically,Februarygold futures bulls have the overall near-term technical advantage.Prices are in a four-week-old uptrend on the daily bar chart. Bulls' nextupside technical objective is pushing and closing prices above chart resistanceat $1,350.00. Bears' next near-term downside price breakout objective isclosing prices below solid technical support at $1,300.00. First support isseen at $1,312.70 and then at $1,307.10. First resistance is seen at today'shigh of $1,321.40 and then at last week's high of $1,327.30. Wyckoff's MarketRating: 6.0

Marchsilver bulls have the overall near-term technical advantage. Prices are stillin a four-week-old uptrend on the daily bar chart. The next upside price breakoutobjective is closing futures prices above solid technical resistance at theOctober high of $17.59 an ounce. The next downside price breakout objective forthe bears is closing prices below solid support at the October low of $16.435. Firstresistance is seen at last week's high of $17.32 and then at $17.50. Nextsupport is seen at $17.00 and then at $16.865. 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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