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Gold bulls continue to push prices higher, helped by oil rebound

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(Kitco News) -  Gold prices are holding decent gains in midday U.S. trading Thursday, due in part to the solid rebound in the crude oil market following the early-week collapse in oil prices. Crude oil is arguably the leader of the raw commodity sector that includes the metals, and when oil’s price is in a free fall, the rest of the sector feels the downside pressure, too. Safe-haven demand for gold and to a lesser degree silver remains a feature amid a very sick global economy. June gold futures were last up $13.00 an ounce at $1,750.00. May Comex silver prices were last up $0.065 at $15.395 an ounce.

Stable stock markets late this week are also favoring the metals market bulls, giving them the confidence to step in an buy, as opposed being spooked onto the sidelines by dropping equities or a collapsing oil market, amid the Covid-19 pandemic.

Global stock markets were narrowly mixed in overnight trading. The stock markets are working to recover from early-week pressure tied to the historic collapse in crude oil prices. Oil prices are sharply higher again today, with Nymex West Texas Intermediate (WTI) June futures trading up around $3.80 at $17.60. U.S.-Iran tensions up-ticked Wednesday when President Trump tweeted that he has instructed the U.S. navy to “destroy” any Iranian vessels that harass U.S. ships. That’s a bullish development for crude oil markets.

North American and European citizens are still mostly locked down as the debate intensifies on the question of when to reopen local, regional and national economies. Opinions on the matter very widely, with there being no absolutely correct answer.

In more signs the Covid-19 pandemic is wreaking severe pain on the global economy, the Euro zone April composite purchasing managers index (PMI) came in at 13.5 versus 29.7 in March. The April reading was well below market expectations. A reading below 50.0 suggests contraction. U.S. PMI data out today showed dismal results, with the Markit flash services PMI at 27.0 and the manufacturing PMI at 36.9 in April.

The other important outside markets today see the U.S. dollar index weaker. The 10-year U.S. Treasury note yield is trading around 0.615% today—up from levels seen earlier this week and a sign of a bit less anxiety in the marketplace.

This morning’s weekly jobless claims report showed a rise of 4.4 million, which was in line with market expectations. Gold prices did back down a bit right around the time of the release of the data but then recovered fairly quickly.

Live 24 hours gold chart [Kitco Inc.]

Technically, June gold futures bulls have the solid overall near-term technical advantage and have gained more power late this week. Gold bulls' next upside near-term price objective is to produce a close above solid technical resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing prices below solid technical support at this week’s low of $1,666.20. First resistance is seen at today’s high of $1764.30 and then at $1,775.00. First support is seen at today’s low of $1,730.60 and then at $1,700.00. Wyckoff's Market Rating: 8.5

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls have the slight overall near-term technical advantage. However, a four-week-old uptrend on the daily bar chart is still in jeopardy. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $16.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at today’s high of $15.72 and then at $16.00. Next support is seen at today’s low of $15.205 and then at $15.00. Wyckoff's Market Rating: 5.5.

May N.Y. copper closed up 190 points at 230.90 cents today. Prices closed near mid-range today. The copper bears have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 235.80 cents. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of 214.95 cents. First resistance is seen at today’s high of 233.95 cents and then at the April high of 235.80 cents. First support is seen at today’s low of 227.20 cents and then at 225.00 cents. Wyckoff's Market Rating: 4.5.

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.