Gold Punished By Hawkish New Fed Chief

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(Kitco News) - Gold prices wereending the U.S. day session solidly lower and hit a two-week low Tuesday. Theprecious metals bulls got punched in the nose by new Federal Reserve ChairmanJerome Powell, who sounded a hawkish tone on future U.S. monetary policy. April Comex gold futures were last down $16.00 an ounce at $1,316.80. March Comex silver was last down $0.212 at $16.41 an ounce.

Powell'stestimony to the U.S. House of Representatives on Capitol Hill was the featurein the marketplace so far this week. Powell said the Fed remains on pace togradually raise U.S. interest rates, amid increasing economic growth and risinginflation. He said the U.S. economy has strengthened even since December andthat the risk of an economic recession is low. Powell also said the recentstock market volatility is not a significant detriment to the U.S. economy.

TheU.S. dollar index rallied to a two-week high on Powell's hawkish-construedtestimony. The U.S. stock market and U.S. Treasuries were also pressured by theFed chief's remarks today. Powell speaks to the U.S. Senate on Thursday.

Theother key outside market on Tuesday saw Nymex crude oil prices weaker andtrading just above $63.00 a barrel. Growing U.S. oil production the past fewmonths is a major factor that is likely to cap oil price advances.

Technically,Aprilgold futures prices closed nearer the session low today. The gold bullsstill have the slight overall near-term technical advantage but faded badlytoday and need to show fresh power soon to keep their chart edge. 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 theFebruary low of $1,309.00. First resistance is seen at $1,325.00 and then at$1,330.00. First support is seen at today's low of $1,314.40 and then at$1,309.00. Wyckoff's Market Rating: 5.5

Marchsilver futures prices closed nearer the session low and hit a two-week lowtoday. The silver bears have the overall near-term technical advantage. Silverbulls' next upside price breakout objective is closing prices above solidtechnical resistance at the February high of $17.04 an ounce. The next downsideprice breakout objective for the bears is closing prices below solid support at$16.00. First resistance is seen at $16.50 and then at today's high of $16.72.Next support is seen at today's low of $16.34 and then at the February low of$16.21. Wyckoff's Market Rating: 4.0.

March N.Y. copper closed down 380 points at 318.60 cents today. Prices closed nearerthe session low. The copper bulls still have the firm overall near-termtechnical advantage. Copper bulls' next upside price objective is pushing andclosing prices above solid technical resistance at the December high of 333.35cents. The next downside price objective for the bears is closing prices belowsolid technical support at the February low of 304.65 cents. First resistanceis seen at 320.00 cents and then at today's high of 323.70 cents. First supportis seen at today's low of 316.30 cents and then at 315.00 cents. Wyckoff'sMarket Rating: 6.5.

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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