Gold Slightly Down On Chart Consolidation

(Kitco News) - Gold pricesare just a bit lower in early U.S. trading Wednesday, on some minorbacking and filling on the charts after prices scored a four-month high onTuesday. February Comex gold was last down $1.40 an ounce at $1,335.60. March Comex silver was last up $0.021 at $17.21 an ounce.

Goldand silver market bulls are still sitting comfortable, amid their positivechart postures, a depreciating U.S. dollar, and some worries about the U.S.government shutting down late this week due to budget disagreements amongRepublicans and Democrats.

Worldstock markets were mixed overnight. U.S. stock indexes are pointed towardsolidly higher openings when the New York day session begins. The rebound inthe U.S. stock market after Tuesday's afternoon's selling pressure is also anegative for the gold and silver markets.

Inovernight news, the Euro zone reported its December consumer price index at up0.4% from November and up 1.4%, year-on-year. Those numbers were right in linewith market expectations.

Thekey outside markets on Wednesday morning see the U.S. dollar index higher on acorrective bounce after hitting a 3.5-year low earlier this week. The greenbackbears still have the solid overall near-term technical advantage, to suggestmore pressure in the near term.

Meantime,Nymex crude oil prices are weaker on some more profit taking after hitting athree-year high of $64.89 a barrel on Tuesday. The oil bulls are technicallystrong to suggest still more gains in the near term. Such would be bullish forthe precious metals markets.

U.S.economic data due for release Wednesday includes the weekly MBA mortgageapplications survey, the Goldman Sachs and Johnson Redbook retail salesreports, industrial production and capacity utilization, the NAHB housingindex, Treasury international capital data and the Federal Reserve's beigebook.

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 Tuesday's low of $1,332.10 and then at $1,325.00. Firstresistance is seen at Tuesday's 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 are in a five-week-olduptrend on the daily bar chart. The next upside price breakout objective isclosing futures prices above solid technical resistance at the October high of $17.59an ounce. The next downside price breakout objective for the bears is closingprices below solid support at the October low of $16.435. First resistance isseen at $17.32 and then at the overnight high of $17.45. Next support is seenat $17.00 and then 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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