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By Jim Wyckoff
Of Kitco News
Of Kitco News
(Kitco News) – Comex gold futures prices are just modestly higher in early U.S. trading Wednesday, on a corrective, short-covering bounce from Tuesday’s selling pressure. Some mild bargain hunting buying interest is also featured early Wednesday.
The key “outside markets” are also in a mildly bullish posture for the precious metals so far Wednesday, as the U.S. dollar index is slightly lower and crude oil prices are slightly higher. Traders are awaiting a speech from U.S. Federal Reserve Chairman Ben Bernanke Wednesday afternoon. April gold last traded up $3.90 at $1,650.90 an ounce. Spot gold was last quoted down $0.10 an ounce at $1,651.25. May Comex silver last traded up $.0246 at $32.08 an ounce.Fed Chairman Bernanke will give his remarks to a U.S. House of Representatives committee Wednesday afternoon. Traders are keenly awaiting his comments. It was just three weeks ago when Bernanke’s comments to Congress saw a more upbeat assessment of the U.S. economy, which in turn sent gold prices careening lower. Gold prices are still trying to recover.
The U.S. dollar index is slightly lower in early trading Wednesday, as the index bulls are fading. That’s a positive for the precious metals. Meantime, crude oil prices are trading modestly higher, which is also a positive for today’s price action in gold and silver.
The European Union sovereign debt crisis has been moved to the back burner of the market place recently, amid a stabilization of that situation, at least for the time being. The calmer EU front is also a negative for the safe-haven gold market.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly DOE liquid energy stocks report, and existing home sales.
The London A.M. gold fixing was $1,656.00 versus the previous P.M. fixing of $1,656.75.
Technically, gold futures bears still have some downside near-term technical momentum as prices are in a three-week-old downtrend on the daily bar chart. The bulls’ next near-term upside price breakout objective is to produce a close above psychological resistance at $1,700.00. Bears’ next near-term downside price objective is closing prices below psychological support at $1,600.00. First resistance is seen at the overnight high of $1,660.00 and then at this week’s high of $1,670.10. First support is seen at this week’s low of $1,641.20 and then at last week’s low of $1,634.70.
May silver futures prices are also in a three-week-old downtrend on the daily bar chart and the bears have some downside technical momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $34.41 an ounce. The next downside price breakout objective for the bears is closing prices below major psychological support at $30.00. First resistance is seen at $32.50 and then at Tuesday’s high of $32.96. Next support is seen at last week’s low of $31.625 and then at $31.00.
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source: forbes.com
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