Gold Prices See Corrective Rebound
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(Kitco News) - Gold prices are moderately higher in early U.S. trading Wednesday, on a short-covering and bargain-hunting rebound following recent strong selling pressure that pushed the market to a five-week low earlier this week. April gold futures were last up $4.10 an ounce at $1,288.80. May Comex silver was last up $0.055 at $15.16 an ounce.
The just-released ADP national employment report for February showed a rise of 183,000, which was close to market expectations for a rise of 185,000. The markets showed little reaction to the report.
Asian and European stock markets were narrowly mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The world marketplace remains in a generally “risk-on” mood.
Traders and investors are awaiting U.S. trade data due to be released shortly, as it could provide clues on the impact on the U.S. economy from the U.S.-China trade war. The consensus forecast for the U.S. trade deficit in December is $57 billion, overall.
In overnight news, the Paris-based OECD think tank released a report saying a finalized U.S.-China trade deal is not likely to give the world economy a significant boost. The report said even if a deal is reached between the world’s two largest economies, there will remain uncertainty over matters that the trade deal is not likely to address, such as China’s rules for U.S. companies doing business in China. The OECD also reduced its growth projections for most of the major world’s economies for this year and in 2020. The report predicts overall world economic growth at 3.3% this year, which is down from the OECD’s last projection in November of 3.5% growth for 2019.
Attention of the marketplace is turning to the European Central Bank’s regular monetary policy meeting on Thursday. The ECB is expected to loosen its purse strings and provide more low-interest financing to Euro zone banks in order to stimulate an anemic Euro zone economy.
The U.S. March jobs report from the Labor Department is due out Friday morning. That’s arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 180,000.
The key outside markets today see the U.S. dollar index slightly firmer. The greenback bulls have regained technical strength recently. Nymex crude oil prices are lower and trading around $56.00 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the ADP national employment report, the international trade in goods and services report, the Federal Reserve’s beige book, and the weekly DOE liquid energy stocks report.
Technically, the April gold bulls and bears are on a level overall near-term technical playing field but the bears have momentum on their side. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the January low of $1,281.50. First resistance is seen at $1,290.00 and then at $1,300.00. First support is seen at $1,281.50 and then at $1,275.00. Wyckoff's Market Rating: 5.0
May silver futures bears have the overall near-term technical advantage amid the recent price downdraft. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at Monday’s high of $15.295 and then at $15.50. Next support is seen at $15.00 and then at $14.90. Wyckoff's Market Rating: 4.0.