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Gold, Silver Prices Struggle for Momentum

NEW YORK ( TheStreet ) -- Gold prices went nowhere fast Monday as physical buying supported prices but technical selling prevented any rallies.

Gold for April delivery settled down 80 cents to $1,348.20 an ounce at the Comex division of the New York Mercantile Exchange on extremely low volume. The gold price Monday has traded as high as $1,354.50 and as low as $1,344.10. The spot gold price was up $1.20, according to Kitco's gold index.

The U.S. dollar index was adding 0.01% at $78.06 while the euro was slipping 0.08% at $1.35 vs. the dollar.

Gold is still trading in no man's land with the metal searching for a catalyst. With investor attention on stocks and multiple M&A deals, gold is having a hard time finding direction.

The metal has seemed to stem its violent January selloff, which brought prices down to $1,307 and close to the $1,300 support level. Friday's disappointing jobs number did little to help gold despite the fact that it ensured no rate hike in the near future.




"Trade [will] likely remain volatile as investors react to Friday's jobs data," says James Moore, research analyst at fastmarkets.com, "Gold ... has found good support around $1,344 but requires a break above the 100-day moving average, $1,362.20, to avoid another round of stale long liquidation."

An interest rate hike might be in the future for England as its central bank meets Thursday. Inflation in the country hit 3.7%, well over the limit of 2%, and rumors have been bubbling about a rate increase, the first since 2007. But with unemployment around 8% and youth unemployment at 10%, England will have to weigh the risks of fighting inflation and limiting growth. The European Central Bank chose growth last week by keeping its interest rates at historically low levels.

An interest rate increase could provide more headwinds for gold.

Other emerging-market economies with heated inflation like Russia are still hesitant to raise rates, but are taking less aggressive and more gold friendly action. Russia's central bank increased the amount of money banks must hold in their reserves to take money out of circulation, a move that China tried six times in 2010 and once in 2011.
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