Gold Weaker As New Fed Chairman Powell On Deck

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(Kitco News) - Gold prices aremodestly lower in early morning U.S. trading Tuesday. The precious metals andmost other financial and stock markets are tentative ahead of the first majorspeech by the new U.S. Federal Reserve Chairman, Jerome Powell. April Comex gold futures were last down $1.60 an ounce at $1,331.30. March Comex silver waslast up $0.008 at $16.625 an ounce.

Tradersand investors are anxiously awaiting Powell's testimony to the U.S. House ofRepresentatives on Capitol Hill at 10:00 a.m. EST today. In his just-releasedprepared remarks to lawmakers, Powell said the Fed remains on pace to graduallyraise U.S. interest rates, amid increasing economic growth and risinginflation. Powell suggested inflationary pressures are not now, and notexpected to become, problematic. Powell said the recent stock market volatilityis not a significant detriment to the U.S. economy. At first blush, Powell'sremarks tend to favor the hawkish camp on monetary policy.

Powellspeaks to the U.S. Senate on Thursday. Traders and investors will parse hisevery word for clues on the direction and timing of U.S. monetary policy moves.

Worldstock markets were mixed to weaker overnight. U.S. stock indexes are pointed toslightly lower openings when the New York day session begins. The U.S. stockindex bulls have now regained all of the sharp losses seen in February. Thestrong rebound in the stock indexes has been a bearish element for thecompeting asset class, precious metals. However, now the specter of big andbearish double-top reversal patterns exists on the daily bar charts for theU.S. stock indexes, if prices challenge the January highs.

Thekey outside markets on Tuesday morning see the U.S. dollar index trading modestlyhigher. The greenback did move a bit higher in the wake of Powell's preparedtestimony to Congress.

Meantime,Nymex crude oil prices are slightly weaker and trading near $64.00 a barrel.Growing U.S. oil production the past few months is a major factor that islikely to cap oil price advances.

U.S.economic data due for release Tuesday includes the weekly Johnson Redbook andGoldman Sachs retail sales reports, the advance economic indicators report, theS&P/Case-Shiller home price index, the monthly house price index and theconsumer confidence index.

Technically,Aprilgold futures bulls have the overall near-term technical advantage. Goldbulls' next upside near-term price breakout objective is to produce a closeabove solid technical resistance at the January high of $1,370.50. Bears' nextnear-term downside price breakout objective is pushing prices below solidtechnical support at the February low of $1,309.00. First resistance is seen attoday's high of $1,338.40 and then at this week's high of $1,342.90. Firstsupport is seen at today's low of $1,324.90 and then at last week's low of$1,322.90. Wyckoff's Market Rating: 6.0

Marchsilver futures bears have the slight overall near-term technical advantage.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at the February high of $17.04 an ounce. The nextdownside price breakout objective for the bears is closing prices below solidsupport at $16.00. First resistance is seen at this week's high of $16.785 andthen at $17.00. Next support is seen at this week's low of $16.50 and then atthe February low of $16.21. Wyckoff's Market Rating: 4.5.

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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