technical breakout and bounce off support, page-5

Yep its all Looking good for GOLD ,IGR will back into the 70s very soon.

Food prices continue to rise,hyper inflation in play..

(Kitco News) - Comex gold futures closed solidly higher and hit a fresh three-week high Tuesday. Worries about inflationary pressures increasing worldwide worked to boost the safe-haven yellow metal after news that China raised its interest rates overnight. Comex April gold last traded up $16.30 at $1,364.50 an ounce. Spot gold last traded up $12.10 at $1,364.75.

Many commodity markets initially felt selling pressure Tuesday morning on the overnight news that China has raised key interest rates by around 0.25% in a move to curb domestic demand for commodities and reduce inflationary pressures. While the China rate hike news was not surprising, the timing did catch the markets off guard. The talk in the market place was that once China came back from its Lunar new year holiday, fresh demand for commodities from China would stoke the already bullish raw commodity sector.

While some commodity markets were initially pressured on the idea that higher interest rates in China would crimp demand, traders soon reckoned demand for raw commodities from China will remain strong. Gold traders, in particular, focused on the inflationary aspects of the China rate hike being bullish for gold.

The U.S. dollar index traded weaker Tuesday morning, and that was an underlying bullish factor for the precious metals. The dollar index bulls had gained some fresh upside technical momentum recently, but need to show fresh power very soon to keep it. If the dollar index can work sideways to higher in the near term, that would also be a bearish factor for the precious metals.

The London P.M. gold fix was $1,363.50 versus the previous P.M. fixing of $1,347.50.

Technically, April Comex gold futures prices closed nearer the session high Tuesday. The gold market bulls Tuesday gained fresh upside near-term technical momentum by pushing April futures prices to a fresh three-week high of $1,368.70 an ounce. The gold market has rallied well up from the late-January low of $1,309.10, basis April futures.

The gold market bulls have the overall near-term and longer-term technical advantage. Bulls' next near-term upside technical breakout objective is to produce a close above solid technical resistance at $1,380.00. Bears' next near-term downside price breakout objective is closing prices below solid trend-line support at the $1,340.00 area. First resistance is seen at Tuesday's high of $1,368.70 and then at $1,375.00. Support is seen at $1,361.00 and then at $1,355.00. Wyckoff's Market Rating: 6.5.