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Gold gains as U.S. stock market posts strong rally; what gives?

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(Kitco News) - Gold prices are trading solidly up in midday U.S. trading Thursday, on some safe-haven demand and some chart-based buying despite strong gains in the U.S. stock market. Reason: The gold bulls are this week more confident to get out of some cash and do some buying of the safe-haven metal, still reckoning there will be rough seas ahead in the marketplace in the coming weeks, or longer. April gold futures were last up $15.50 an ounce at $1,648.70. May Comex silver prices were last down $0.163 at $14.71 an ounce.

Traders and investors quickly brushed off Thursday morning’s weekly jobless claims report, which showed a shocking rise of 3.2 million claims, which was larger than expected, but still not big surprise. This weekly report was the first one to more fully reflect a U.S. economy that has been severely crippled by the closure of most retail stores across the nation due to the coronavirus outbreak that continues to spread rapidly in the U.S.

U.S. stock index futures are sharply higher at midday, and if they hold those strong gains into the close it would be an early clue the stock indexes have put in at least near-term bottoms if not major bottoms. Global stock markets were mostly lower in overnight trading.

The U.S. equity market was boosted in part on overnight news the U.S. Senate passed a $2.2 trillion financial aid package for U.S. businesses and citizens negatively impacted by the Covid-19 outbreak. The measure was expected to be passed and now moves to the House of Representatives for a vote.

The important outside markets today see Nymex crude oil prices down and trading around $23.25  a barrel. The U.S. is pressuring Saudi Arabia to hold off on producing more oil that is helping to cripple the U.S. economy. It’s doubtful the Saudis will listen as they hate the U.S. fracking industry. The U.S. dollar index is again sharply lower as greenback bulls are fading fast after the USDX hit a 17-year high earlier this week. The 10-year U.S. Treasury note yield is trading around 0.81% Thursday.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bulls have the firm overall near-term technical advantage amid highly volatile trading. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the March high of $1,704.30. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,600.00. First resistance is seen at today’s high of $1,672.50 and then at the February high of $1,691.70. First support is seen at $1,625.00 and then at today’s low of $1,611.00. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls and bears are on a level overall near-term technical playing field. The recent V-Bottom reversal pattern suggests a market bottom is in place. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $11.64. First resistance is seen at $16.00 and then at $16.25. Next support is seen at Wednesday’s low of $14.205 and then at $14.00. Wyckoff's Market Rating: 5.0.

May N.Y. copper closed down 295 points at 217.40 cents today. Prices closed nearer the session low today. The copper bears have the overall near-term technical advantage, but more gains this week would suggest a market bottom is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 240.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 197.25 cents. First resistance is seen at this week’s high of 223.95 cents and then at 230.00 cents. First support is seen at Wednesday’s low of 214.95 cents and then at 210.00 cents. Wyckoff's Market Rating: 3.0.

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 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.