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A.M. Kitco Metals Roundup: Comex Gold Near Steady in Quieter Trading; Technicals Turn More Bullish

(Kitco News) - Comex gold futures prices are trading near steady and did hit another fresh four-week high Wednesday. An improving technical posture is supporting fresh investor buying interest in gold. Comex April gold last traded up $0.60 at $1,374.70 an ounce. Spot gold last traded up $0.20 at $1,374.00.

The U.S. dollar index is trading near steady Wednesday morning. The dollar index bulls still have some near-term technical momentum as the index has hit a fresh four-week high this week. The recent strength in the dollar index has somewhat limited price advances in the gold market.

The specter of inflationary price pressures is an underlying bullish factor for the precious metals. A sharp rise in U.K. consumer price inflation and a significant increase in Chinese consumer inflation, reported Tuesday, reminded the market place that inflation is clearly evident. The Continuous Commodity Index hit another record high this week, and with world economies growing more rapidly coming out of recessions, problematic consumer price inflation worldwide is very possible. Combine the above with the fact that central banks have been pumping money into the world financial system for months and many will argue that's a perfect concoction for serious inflationary price pressures. Historically, inflation has proven to be very bullish for the precious metals.

Reports overnight said very strong demand for physical gold from Asia continues to underpin market prices.

U.S. economic reports due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction, the producer price index, and industrial production and capacity utilization.

The London A.M. gold fixing was $1,374.50 versus the previous P.M. fixing of $1,372.75.

Technically, the gold market bulls have gained fresh upside near-term technical momentum this week by pushing prices above solid chart resistance levels and to a fresh four-week high. Prices are in a three-week-old uptrend on the daily bar chart.

Gold bulls' next near-term upside technical breakout objective is to produce a close above solid technical resistance at $1,394.70. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,350.00. First resistance is seen at the overnight high of $1,378.50 and then at $1,385.00. Support is seen at the overnight low of $1,370.50 and then at Tuesday's low of $1,361.30.

March silver futures last traded up 9.4 cents at $30.795 an ounce Wednesday morning. Prices hit a fresh six-week high Tuesday. Silver bulls have the solid overall near-term and longer-term technical advantage. Prices are in a three-week-old uptrend on the daily chart.

The next downside price breakout objective for the silver bears is closing prices below solid technical support at $29.50. Bulls' next upside price objective is producing a close above solid technical resistance at the January contract and 30-year high of $31.275 an ounce. First support is seen at Tuesday's low of $30.475 and then at $30.00. Next resistance is seen at Tuesday's high of $30.905 and then at $31.00.

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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