Gold Prices Can't Withstand Strong Greenback, Sharp Drop In Oil

(Kitco News)- Gold and silver prices ended the U.S. day session solidly lower Wednesday, with goldhitting a four-week bottom and silver a six-week low. Fully bearish “outsidemarkets” were behind the selling pressure in the precious metals today, as theU.S. dollar index rallied sharply and crude oil prices were solidly lower andhit a five-week low. April Comex gold futures were last down $12.40 an ounce at$1,317.20. March Comex silver was last down $0.26 at $16.32 an ounce.

Thethe U.S. dollar index was higher on some more safe-haven demand today.Technical indicators are now starting to suggest the USDX has put in a near-termbottom. Meantime, Nymex crude oil prices were trading around $61.50 a barrel inafternoon dealings. The shaky world equity markets have prompted sellingpressure in the crude oil markets. The daily chart for Nymex crude oil is nowhinting the market has put in a near-term top.

Worldstock markets posted solid rebounds Wednesday, following the lead of the U.S.stock indexes Tuesday. U.S. stock indexes were mixed Wednesday afternoon, butthe daily volatility was still high. Serious near-term technical damage hasbeen inflicted on the U.S. stock indexes recently, to suggest more sellingpressure in the near term. Despite the selling pressure seen in gold and silverrecently, a bear market in equities would be a longer-term bullish developmentfor the competing asset class of precious metals.

Technically,April gold futures prices closed the day session near the session. The goldbulls still have the slight overall near-term technical advantage, but havefaded badly recently and need to show fresh power soon to keep it. Gold bulls'next upside near-term price breakout objective is to produce a close abovesolid technical resistance at $1,350.00. Bears' next near-term downside pricebreakout objective is pushing prices below solid technical support at $1,300.00.First resistance is seen at $1,325.00 and then at today’s high of $1,334.80.First support is seen at $1,314.00 and then at $1,310.00. Wyckoff's MarketRating: 5.5

Marchsilver futures prices closed nearer the session low today and hit a six-week low.The silver bears have the firm overall near-term technical advantage and gainedmore power today. Silver bulls' next upside price breakout objective is closingprices above solid technical resistance at $17.00 an ounce. The next downsideprice breakout objective for the bears is closing prices below solid support atthe December low of $15.635. First resistance is seen at $16.50 and then attoday’s high of $16.73. Next support is seen at today’s low of $16.21 and thenat $16.00. Wyckoff's Market Rating: 3.0.

MarchN.Y. copper closed down 985 points at 309.05 cents today. Prices closed nearthe session low, hit a seven-week low and scored a big and bearish “outsideday” down on the daily bar chart. The key “outside markets” were bearish forcopper today as the U.S. dollar index was solidly higher and crude oil priceswere solidly lower. The copper bulls still have the overall near-term technicaladvantage but faded today. Copper bulls' next upside price objective is pushingand closing prices above solid technical resistance at this week’s high of325.75 cents. The next downside price objective for the bears is closing pricesbelow solid technical support at 300.00 cents. First resistance is seen at315.00 cents and then at 318.00 cents. First support is seen at today’s low of308.50 cents and then at 305.0 cents. 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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