(Kitco News) - Comex gold futures prices are trading modestly higher Wednesday morning, as a wilting U.S. dollar index is providing a lift to the precious metals. The commodity sector, in general, is seeing price strength Wednesday, which is also boosting gold. February Comex gold last traded up $6.60 at $1,374.80 an ounce. Spot gold last traded up $7.20 at $1,375.50. The U.S. dollar index is trading lower again Wednesday morning and hit another fresh two-month low overnight as the greenback bears have gained fresh downside near-term technical momentum. If the U.S. dollar index continues on a downward path in the near term, look for gold prices to then trade sideways to higher. The precious metals markets and other commodity markets are keenly awaiting Thursday's Chinese consumer price inflation data. The Chinese government has warned it wants to keep domestic consumption and commodity price inflation in check. Any high inflation readings in China would be bearish for all commodity markets, as it would hint that Chinese monetary officials would implement new measures to crimp Chinese demand. Just last week Chinese monetary authorities raised the reserve requirement ratio for banks by 0.5%, to 19%, in an effort to reduce borrowing and cap inflationary pressures in the world's most populous nation. Increasing investor risk appetite worldwide has recently worked to limit buying interest in the gold market. The U.S. stock indexes have hit fresh multi-year highs this month, to compete with demand for gold. Gold tends to see more investment demand during times of keener geopolitical or economic/financial uncertainty. Crude oil futures prices are trading higher Wednesday morning, hovering near $92.00 a barrel. The recent strength in crude oil prices is an underlying bullish underlying factor for the precious metals markets. If crude oil moves above $95.00 a barrel, that is likely to draw more investor interest into gold on ideas inflationary price pressures are heating up. U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the weekly Goldman Sachs chain store sales index, new residential construction and building permits, the weekly API energy stocks report, and the weekly Johnson Redbook retail sales report, The London A.M. gold fixing was $1,373.75 versus the previous P.M. fixing of $1,369.50. Technically, the gold market bulls need to show more power soon. Prices are still in a three-week-old downtrend on the daily bar chart. A bearish head-and-shoulders top reversal pattern has also formed on the daily bar chart for February Comex gold. However, no serious near-term chart damage has occurred in the gold market recently. Gold market bulls do still have the overall longer-term technical advantage. Gold bulls' next near-term upside technical objective is to produce a close above solid technical resistance at last week's high of $1,392.90. Bears' next near-term downside price objective is closing prices below solid technical support at the January low of $1,352.70. First resistance is seen at $1,380.00 and then at $1,385.00. Support is seen at the overnight low of $1,365.50 and then at $1,361.60. March silver futures last traded up 40.3 cents at $29.315 an ounce Wednesday morning. Silver prices are in a three-week-old downtrend on the daily bar chart. No serious near-term chart damage has occurred in silver recently. Silver bulls do still have the overall longer-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at this week's low of $28.05. Bulls' next upside price objective is producing a close above solid technical resistance at $30.00 an ounce. First resistance is seen at $29.50 and then at $29.75. Next support is seen at $29.00 and then at the overnight low of $28.815.

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