(Kitco News) - Gold prices ended the U.S. day session modestly higher and hit a three-week high Wednesday, on some more safe-haven demand amid a shaky U.S. stock market at mid-week. A weakening U.S. dollar index recently is also working in favor of the precious metals market bulls. April Comex gold was last up $3.00 an ounce at $1,249.50. May Comex silver was last down $0.018 at $17.57 an ounce.

An apparent terror attack near the Parliament building in London that killed at least one person did not have a significant impact on the marketplace. Details of the event were still unfolding as of this writing. Markets have become mostly desensitized to such terror events and consider it an unfortunate part of modern day life now.

Focus of the world marketplace is turning to a Thursday vote by the U.S. House of Representatives on a bill to abolish the Affordable Care Act, also known as Obamacare. There are now some serious doubts whether the Republicans can muster enough votes to strike down Obamacare. A failure of the House to repeal Obamacare would throw into serious question President Trump’s ambitious pro-business plans of cutting taxes and regulations. Trump’s aforementioned agenda being successfully moved through the U.S. Congress in the coming few months had been the cornerstone of the U.S. and world stock markets’ rallies that began in early November.

Precious metals traders should also take note of the developments in the U.S. stock market Tuesday. The S&P 500 stock index futures saw a technically bearish downside “breakout” from a sideways trading range, which produced the most near-term chart damage the index has seen in months. Tuesday’s bearish price action is a technical clue the S&P has put in a near-term market top. Money flows had been heavy into the U.S. and other world stock markets since early November. Many veteran traders and investors had been looking for a good-sized corrective pullback in the stock indexes for some time. Is this the beginning of that big downside correction? Has the “Trump trade” finally faded? It’s too soon to say with much confidence, but by the end of trading on Friday, better conclusions can be made on the matter.

If the U.S. and world stock markets do embark on serious downside corrections, such would have significant implications for other markets, including the precious metals. Gold and other raw commodity markets, as well as government bonds, could all benefit as the all-important money flows would move away from equities and into other asset categories.

The key outside markets on Wednesday saw the U.S. dollar index trading lower and hit another six-week low. The greenback bears have technical momentum as prices are in a fledgling downtrend on the daily bar chart. Meantime, Nymex crude oil prices were lower and hit a four-month low overnight, amid the bearish specter of growing world oil supplies, especially ramped up U.S. shale-oil production. The crude oil bears have the firm near-term technical advantage.

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Technically, April gold futures prices closed nearer the session high again today and hit another three-week high. The gold bulls and bears are on a level near-term technical playing field but the bulls have momentum on their side. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,264.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,217.50. First resistance is seen at $1,260.00 and then at $1,264.90. First support is seen at today’s low of $1,243.80 and then at $1,235.00. Wyckoff's Market Rating: 5.0

May silver futures prices closed nearer the session high. While the silver market bears still have the overall near-term technical advantage, the recent rebound suggests a near-term market bottom is in place and that prices can trend at least sideways in the near term. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at this week’s high of $17.62 and then at $17.82. Next support is seen at this week’s low of $17.34 and then at $17.23. Wyckoff's Market Rating: 4.0.

May N.Y. copper closed up 135 points at 263.20 cents today. Prices closed near the session high today. The copper bulls and bears are on a level overall near-term technical playing field. Prices are in a five-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 272.50 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 255.85 cents. First resistance is seen at Tuesday’s high of 266.05 cents and then at this week’s high of 270.00 cents. First support is seen at 260.00 and then at today’s low of 258.75 cents. Wyckoff's Market Rating: 5.0.

By Jim Wyckoff

For Kitco News

Follow @jimwyckoff

jwyckoff@kitco.com