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Gold Down Amid Bearish Outside Markets; U.S. Jobs Report on Deck

(Kitco News) - Gold prices ended the U.S. day session modestly lower Wednesday. A downbeat U.S. economic report and bullish “outside market” forces on this day could provide no upside support to gold and silver. The chart-based sellers continue to have the upper hand in both metals markets. June Comex gold was last down $2.90 at $1,190.30 an ounce. July Comex silver was last down $0.074 at $16.505 an ounce.

Gold prices were modestly lower overnight but received a mild, brief lift above unchanged in early U.S. dealings when the U.S. ADP national employment report for May came in at up 169,000, which is a miss to the downside. A rise of 205,000 was expected. That report is leading to ideas Friday’s jobs report from the Labor Department will be weaker than initially expected. Friday’s U.S. employment report for April is expecting to see the key non-farm payrolls number come in at up 220,000.  Look for Friday morning to be the most active trading period of the week, in the wake of the jobs data.

The key “outside markets” on Wednesday saw Nymex crude oil futures prices higher and hit a new five-month high above $62.00 a barrel. The U.S. dollar index  was sharply lower and hit a new 3.5-month low Wednesday. These two markets are presently in a combined bullish technical posture for the precious metals and the entire raw commodity sector—suggesting that the recent “bust” in the raw commodity cycle has ended and that a “boom” in the raw commodity cycle is just around the corner.

In overnight news, Greece reportedly made a debt payment of 200 million Euros to the International Monetary Fund Wednesday. A bigger payment of 750 million Euros is due on May 12. Many European financial market analysts are wondering how Greece is going to come up with the cash for next week’s bigger payment. Other reports Wednesday said EU and IMF officials do not think Greece is making enough effort for its part in the debt restructuring negotiations. The world market place continues to closely monitor this matter. A default by Greece on a debt payment would rattle many markets and likely boost safe-haven assets like gold and U.S. Treasuries.

The London P.M. fix is $1,194.25 versus the previous A.M. fixing of $1,191.25.

Technically, June gold futures prices closed near mid-range. Gold bears have the firm overall near-term technical advantage. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,214.90. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,168.40. First resistance is seen at $1,200.00 and then at $1,210.00. First support is seen at Tuesday’s low of $1,184.90 and then at this week’s low of $1,176.60. Wyckoff’s Market Rating: 2.5

July silver futures prices closed near mid-range today. Silver bears have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $15.595. First resistance is seen at this week’s high of $16.765 and then at $17.00. Next support is seen at Tuesday’s low of $16.345 and then at this week’s low of $16.125. Wyckoff's Market Rating: 3.0.

May N.Y. copper closed down 75 points at 293.25 cents today. Prices closed nearer the session high today. Copper bulls have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of 272.20 cents. First resistance is seen at this week’s high of 295.30 cents and then at 298.00 cents. First support is seen at this week’s low of 289.50 cents and then at 287.00 cents. Wyckoff's Market Rating: 6.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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