April Comex gold last traded up $18.00 at $1,596.00 an ounce. Spot gold was last quoted up $14.90 at $1,597.25. May Comex silver last traded up $0.452 at $29.31 an ounce.
The stronger U.S. dollar index and U.S. Treasury prices Tuesday morning, along with weaker U.S. stock indexes, suggest investor risk appetite has pulled back a bit so far on the day. The solid jump in gold prices early Tuesday does hint that the “risk-off” day in the market place has attracted some fresh safe-haven investor demand for the yellow metal.
In overnight news, Spanish and Italian bond yields held steady following successful government debt auctions in both countries Tuesday. However, the Italian bond auction did see the government’s borrowing costs rise to a three-month high, reports said. The auctions came after the Fitch ratings agency last Friday downgraded Italy’s credit rating. Another Italian bond auction is slated for Wednesday.
The U.S. dollar hit a 3.5-year high against the Japanese yen overnight amid reports the Bank of Japan will continue on its aggressive monetary policy easing path. Asian stock markets were pressured again Tuesday following the recent spate of Chinese economic data that hints at slowing growth and rising inflationary pressures.
The U.S. dollar index is firmer Tuesday morning and hovering near a seven-month high scored last Friday. The U.S. dollar bulls have solid technical strength to suggest the dollar index can continue to trend higher in the near term. That continues to be a bearish underlying factor for gold and silver. Meantime, Nymex crude oil futures prices are near steady Tuesday. The crude oil bears still have the near-term technical advantage, and that’s also a negative for gold and silver prices.
U.S. economic data due for release Tuesday includes the Manpower quarterly U.S. employment survey, the NFIB small business optimism index, and the weekly Goldman Sachs and Johnson Redbook retail sales reports.
The London A.M. gold fixing is $1,582.50 versus the previous London P.M. fixing of $1,579.00.
Technically, April gold futures prices on Tuesday have seen a bullish upside “breakout” from the sideways trading range of the past two weeks. The bulls on Tuesday did gain some fresh upside near-term technical momentum even though the bears still have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,619.70. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the February low of $1,554.30. First resistance is seen at $1,600.00 and then at $1,610.00. First support is seen at $1,585.80 and then at the overnight low of $1,578.80.
May silver futures hit a fresh two-week high in early trading Tuesday. The bears have the overall near-term technical advantage, but the bulls are regaining a bit of upside momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $29.495 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $27.925. First resistance is seen at $29.495 and then at $29.75. Next support is seen at $29.00 and then at the overnight low of $28.87.
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