Gold Sees Corrective, Short-Covering Bounce

(Kitco News) - Goldpricesare posting a modest rebound in early U.S. trading Friday, following theselling pressure seen on Thursday. It’s been a week of choppy trading in thegold and silver markets. There was no fresh, major fundamental news overnightto drive price action. April Comex gold futures were last up $2.20 an ounce at$1,319.90. May Comex silver was last up $0.033 at $16.455 an ounce.

Worldstock markets were mixed to mostly firmer overnight. U.S. stock indexes arepointed toward slightly lower openings when the New York day session begins.

Inovernight news, the Euro zone reported its consumer inflation rate in Februarywas up 1.1%, year-on-year. That was slightly below expectations of a 1.2% rise.This is another report showing non-problematic inflation in the European Union.In fact, the European Central Bank would like to see an annual inflation rateof around 2.0%.

Thekey “outside markets” on Friday morning see the U.S. dollar index weaker, whichis also a daily positive for the precious metals markets. Trading in the USDXhas also been choppy and sideways recently. Meantime, Nymex crude oil prices areslightly higher.

U.S.economic data due for release Friday includes new residential construction,industrial production and capacity utilization, and the University of Michiganconsumer sentiment survey.

Technically,Aprilgold futures bulls and bears are on a level overall near-term technicalplaying field. Gold bulls' next upside near-term price breakout objective is toproduce a close above solid technical resistance at $1,350.00. Bears' nextnear-term downside price breakout objective is pushing prices below solid technicalsupport at $1,300.00. First resistance is seen at $1,325.00 and then at thisweek’s high of $1,330.50. First support is seen at last week’s low of $1,313.20and then at $1,309.00. Wyckoff's Market Rating: 5.0

May silver futures 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 this week’s high of $16.69 and then at theMarch high of $16.895. Next support is seen at this week’s low of $16.43 andthen at last week’s low of $16.33. Wyckoff's Market Rating: 4.0.

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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