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P.M. Kitco Metals Roundup: Gold Sees Solid Gains on Weak U.S. Data, Bullish Outside Markets

Wednesday April1, 2015 2:20 PM

(Kitco News) - Gold prices ended the U.S. day session sharply higher Wednesday, boosted on heavy short covering in the futures market and bargain hunting on the spot (cash) market. Some downbeat U.S. economic data also propelled gold and silver prices to the upside. Bullish “outside market” forces further worked in favor of the precious metals bulls on this day, as the U.S. dollar index was lower and crude oil prices were sharply higher. June Comex gold was last up $21.70 at $1,204.90 an ounce. May Comex silver was last up $0.357 at $16.955 an ounce.

The March ADP national employment report was released Wednesday morning and came in at up 189,000 in March, which was a significant miss to the downside. Gold prices saw a modest pop to the upside immediately after that report was released. Gold’s gains accelerated when weaker U.S. auto industry sales were reported and when downbeat U.S. manufacturing data was released. Wednesday’s U.S. economic data fell squarely into the camp of the U.S. monetary policy doves and calls into question whether the Federal Reserve will be able to raise interest rates in 2015.

Focus of the market place is turning to Friday’s U.S. jobs report for March. The key non-farm payrolls number is expected to come in at up 248,000. However, with today’s ADP employment report missing to the downside, many market watchers are now wondering if the more important jobs report from the Labor Department on Friday will also be weaker than expected. U.S. markets are closed Friday for the Good Friday holiday. Thus, much of the market reaction to Friday’s jobs report is likely to be seen on Monday.

The United Nations-Iran nuclear talks continued Wednesday, one day past the supposed deadline for an agreement. Crude oil prices have seen downside pressure this week, on ideas an agreement could be reached that would put Iranian crude oil back on an already glutted world market. However, the U.S. has said odds are not high that any agreement will be reached.

In other overnight news, China’s purchasing managers’ index came in above 50.0 in March. The data was deemed upbeat by the market place. The Eurozone manufacturing purchasing managers’ index came in at 52.2 in March versus 51.0 in February, according to the data firm Markit.

The World Bank reported today that Russia’s economic situation has worsened. The Bank said Russian GDP will be down 3.8% in 2015, and will be down even more if crude oil prices average $45 a barrel.

The London P.M. gold fixing is $1,197.00 versus the previous A.M. fixing of $1,181.25.

Technically, June gold futures prices closed nearer the session high today and saw heavy short covering and bargain hunting. Gold bears still have the overall near-term technical advantage. However, follow-through buying on Thursday and a bullish weekly high close would give the bulls some good upside technical momentum. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,223.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at this week’s low of $1,178.20. First resistance is seen at today’s high of $1,208.70 and then at last week’s high of $1,220.40. First support is seen at $1,200.00 and then at $1,190.00. Wyckoff’s Market Rating: 3.5

May silver futures prices closed nearer the session high on short covering and bargain hunting. Bears still have the slight near-term technical advantage in silver. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $17.405 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $16.435. First resistance is seen at today’s high of $17.075 and then at $17.25. Next support is seen at $16.75 and then at today’s low of $16.50. Wyckoff's Market Rating: 4.5.

May N.Y. copper closed up 85 points at 274.85 cents today. Prices closed nearer the session high on short covering. The key “outside markets” were bullish for copper today as the U.S. dollar index was lower and crude oil prices were solidly higher. The copper market bulls have the slight overall near-term technical advantage. A two-month-old uptrend is still in place on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the March high of 291.45 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 265.00 cents. First resistance is seen at today’s high of 276.15 cents and then at 278.70 cents. First support is seen at today’s low of 270.85 cents and then at 270.00 cents. Wyckoff's Market Rating: 5.5.

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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