(Kitco News) - Gold prices are slightly lower but treading water in early U.S. dealings Tuesday. The market place awaits what is arguably the most important development this week: testimony from Fed Chair Janet Yellen in front of the U.S. Congress. The stronger U.S. dollar continues to be a bearish underlying factor working against the precious metals bulls. April Comex gold was last down $1.70 at $1,199.10 an ounce. May Comex silver last traded up $0.001 at $16.295 an ounce.

Markets in Asia and Europe were quieter Tuesday, ahead of the big markets event this week: Fed Chair Janet Yellen making trips to Capitol Hill to testify on monetary policy.
She speaks before the Senate Banking Committee Tuesday and to a House panel on Wednesday. The market place wants to get Yellen’s latest read on U.S. economic conditions and just when the Fed will start to raise interest rates. There are widely mixed opinions and no clear consensus on whether Yellen will sound dovish or hawkish on U.S. monetary policy. Her remarks could move many markets, especially on Tuesday, since she will likely repeat on Wednesday what she says Tuesday.

Reports overnight said Greece and European Union finance officials are mostly in agreement on steps Greece needs to take on debt and economic reforms, in order to qualify for more EU financial aid. This matter continues to simmer down in the eyes of traders and investors…for now.

In other overnight news, the European Union got more downbeat news on the deflation front. Euro zone consumer prices fell in February at a record pace, since EU data began to be recorded in 1997. Eurostat said the bloc’s consumer prices fell 0.5% in January, year-on-year. The dour news prompted the Bank of England to say it stands ready to stimulate monetary policy if needed. The BOE had been on track to raise interest rates, many believed.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the S&P/Case-Shiller home price index, the consumer confidence index, the Richmond Fed business survey, and the U.S. flash services purchasing managers index.

(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)

Wyckoff’s Daily Risk Rating: 6.0 (Trader and investor market risk aversion is not high this week. Progress on the Greece-EU financing talks has temporarily assuaged investor worries about the matter.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The London A.M. gold fixing is $1,195.50 versus the previous P.M. fixing of $1,204.5.0

Technically, April gold futures bears have the firm overall near-term technical advantage as a five-week-old downtrend line is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,223.00. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at the January low of $1,168.30. First resistance is seen at the overnight high of $1,204.40 and then at Monday’s high of $1,210.30. First support is seen at the overnight low of $1,194.30 and then at Monday’s low of $1,190.60. Wyckoff’s Market Rating: 2.5

May silver futures bears have the overall near-term technical advantage as prices hit a seven-week low on Monday. Prices are also in a five-week-old downtrend. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $16.50 and then at Monday’s high of $16.635. Next support is at Monday’s low of $16.115 and then at $16.00. Wyckoff’s Market Rating: 2.5.

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