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Gold price up as China lowers mortgage interest rates

Gold prices are posting decent gains in early U.S. trading Tuesday, while silver prices are lower. The yellow metal is getting a lift due in part to China dropping key interest rates for mortgages in an effort to jumpstart its troubled housing/property sector. That could translate into better demand for metals, down the road, from the world’s second-largest economy. A weaker U.S. dollar index to start the U.S. trading week is also helping out the gold market bulls. April gold was last up $14.30 at $2,038.20. March silver was last down $0.32 at $23.155.

Asian and European stock markets were mixed to lower in overnight trading. U.S. stock index futures are set to open lower when the New York day session begins. It will be a busy week for U.S. corporate earnings reports.

Traders are also looking forward to Wednesday afternoon’s release of the minutes from the last FOMC meeting of the Federal Reserve. Recent warmer U.S. inflation reports have the marketplace thinking the Fed will hold off on lower interest rates until the second half of the year, if even then.

In overnight news, reports said Houthi rebels continue to attack ships traversing the Red Sea.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are a bit weaker and trading around $78.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.277%.

U.S. economic data due for release Tuesday is light and includes leading economic indicators.

Technically, the gold futures bears have the slight overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the February high of $2,083.20. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at $2,040.00 and then at $2,050.00. First support is seen at the overnight low of $2,023.90 and then at last Friday’s low of $2,006.60. Wyckoff’s Market Rating: 4.5.

The silver bears have the overall near-term technical advantage. However, a nine-week-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. Silver bulls’ next upside price objective is closing March futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. First

resistance is seen at $23.445 and then at last week’s high of $23.56. Next support is seen at Friday’s low of $22.84 and then at $22.50. Wyckoff’s Market Rating: 4.0.

Source: Kitco