Gold Prices Pause After Hitting 4-Mo. High Overnight

(Kitco News) - Gold pricesare near unchanged in early U.S. trading Tuesday, as the bulls catchtheir breath after prices scored a four-month high in overnight action. Meantime,silver prices hit a two-month high overnight. The precious metals markets arebeing supported by a plunging U.S. dollar index and a soaring Euro currency. February Comex gold was last down $0.50 an ounce at $1,334.30. March Comex silver waslast down $0.046 at $17.10 an ounce.

Worldstock markets were mostly higher overnight, boosted by increasing optimism onglobal economic growth. Along with that specter come tighter monetary policiesfrom the world's major central banks. U.S. stock indexes are pointed towardsolidly higher openings and new record highs when the New York day sessionbegins. The ability of safe-haven gold to rally when its competing asset classof equities is seeing record highs is impressive for the yellow metal.

Bitcoinprices are plunging again early this week and hit a four-week low overnight.The eroding crypto currency is also working in favor of the gold market, evenif only from a psychological perspective.

Thekey outside markets on Tuesday morning see the U.S. dollar index lower and notfar above Monday's 3.5-year low. The greenback bears have the solid overallnear-term technical advantage, to suggest more pressure in the near term.

Meantime,Nymex crude oil prices are weaker on some mild profit taking after hitting athree-year high of $64.89 a barrel overnight. The recent rally in oil priceshas been a positive development for the raw commodity sector, including theprecious metals.

U.S.data due for release Tuesday is light and includes the Empire StateManufacturing Survey.

Technically,Februarygold futures bulls have the firm overall near-term technical advantage.Prices are in a five-week-old uptrend on the daily bar chart. Bulls' nextupside technical objective is pushing and closing prices above chart resistanceat the September high of $1,365.80. Bears' next near-term downside pricebreakout objective is closing prices below solid technical support at $1,300.00.First support is seen at the overnight low of $1,332.10 and then at $1,325.00. Firstresistance is seen at the overnight high of $1,345.00 and then at $1,350.00.Wyckoff's Market Rating: 6.5

Marchsilver bulls have the overall near-term technical advantage. Prices hit atwo-month high overnight. Prices are in a five-week-old uptrend on the dailybar chart. The next upside price breakout objective is closing futures pricesabove solid technical resistance at the October high of $17.59 an ounce. Thenext downside price breakout objective for the bears is closing prices belowsolid support at the October low of $16.435. First resistance is seen at $17.32and then at the overnight high of $17.45. Next support is seen at $17.00 andthen at the overnight low of $16.80. 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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