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A.M. Kitco Metals Roundup: Comex Gold Lower as U.S. Dollar Index Rebounds, Traders Square Positions

(Kitco News) - Comex gold futures prices are trading lower Wednesday morning and have moved back below psychological resistance at $1,400.00 an ounce. The gold market is being pressured by a firmer U.S. dollar index and by some profit taking and position-squaring as the holidays approach. February Comex gold last traded down $11.20 at $1,393.10 an ounce. Spot gold last traded down $3.70 at $1,392.50.

The U.S. dollar index is trading firmer Wednesday morning, which is bearish for the precious metals. The Euro is under some fresh selling pressure Wednesday amid the ongoing EU debt crisis that now sees protests occurring in Greece. U.S. Treasury yields are at six-month highs, which is also supporting the greenback and pulling some investment demand away from the precious metals. The one-day FOMC meeting Tuesday concluded with a Fed statement that was virtually unchanged from six weeks ago. That is being deemed a bit dollar-bullish because the Fed did not appear to be leaning any harder toward more economic stimulus.

As the holidays approach, look for trader interest in the markets to wane, which is likely to mean some profit-taking and book-squaring that are likely to limit the upside in the precious metals prices for the next two weeks.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Empire State manufacturing survey, the Consumer Price Index, industrial production and capacity utilization, the NAHB housing market index and Treasury international capital data.

The London A.M. gold fixing was $1,388.25 versus the previous P.M. fixing of $1,394.50.

Technically, February Comex gold futures bulls still have the overall near-term and longer-term technical advantage. A 4.5-month-old uptrend is still in place on the daily bar chart.

Bulls' next near-term upside technical objective is to produce a close above strong technical resistance at the all-time high of $1,432.50. Bears' next near-term downside price objective is closing prices below solid technical support at $1,372.00. First resistance is seen at $1,400.00 and then at this week's high of $1,408.90. Support is seen at the overnight low of $1,386.60 and then at this week's low of $1,380.80.

March silver futures last traded down 45.3 cents at $29.335 an ounce Wednesday. The silver bulls still have the solid overall near-term technical advantage.

Silver prices are in a 4.5-month-old uptrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at $28.00. Bulls' next upside price objective is producing a close above solid technical resistance at last week's high of $30.75 an ounce. First resistance is seen at the overnight high of $29.645 and then at $30.00. Next support is seen at the overnight low of $28.925 and then at $28.50.

By Jim Wyckoff of Kitco News; jwyckoff@kitco.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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