Gold And Silver Bulls Bruised By Rebounding Greenback

New York (Jan 9)  Gold and silver prices were ending the U.S. day session weaker Tuesday. A solid bounce in the U.S. dollar index early this week is putting price pressure on the gold and silver markets. Some normal profit-taking and chart consolidation is also featured after gold prices hit a 3.5-month high last week. February Comex gold was last down $7.30 an ounce at $1,313.10. March Comex silver was last down $0.139 at $17.005 an ounce.

World stock markets were mostly firmer Tuesday, including U.S. stock indexes hitting new record highs, again. There continues to be little risk aversion in the world marketplace, at present, and that’s a negative element for the safe-haven gold and silver markets.

The key outside markets on Tuesday saw the U.S. dollar index higher on another corrective bounce from recent selling pressure. While the greenback bears still have the overall near-term technical advantage, the bulls are out of the shoot in good fashion so far this week.

Nymex crude oil prices were solidly higher and hit a three-year high of $62.97 a barrel Tuesday. Traders are waiting to see if the U.S. implements new economic sanctions against Iran, which could limit their oil exports. The recent rally in oil prices has been a positive development for the precious metals markets.

Important for the precious metals and other markets are recent prognostications from noted analysts that the long-term bull market runs in U.S. Treasuries are over. Longer-term technical damage has been inflicted on T-Bond and T-Note charts. This suggests rising interest rates and rising inflation. While the tighter monetary policy that generally comes with rising inflation has been bearish for the metals, per recent history, longer-term history actually shows that hard assets such as precious metals benefit from rising inflation. Times of problematic inflation see the investing public general opt for hard assets over paper assets. The next shoe to drop in this scenario of rising inflation will be a major top being put in the U.S. stock market. Veteran gold and silver market bulls are patiently (well, some maybe not so patiently) waiting.

Technically, February gold futures prices closed nearer the session low. The bulls still have the overall near-term technical advantage, amid a four-week-old uptrend in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00.

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