Gold, silver bulls work on price stabilization at mid-week
(Kitco News) - Gold and silver prices are trading not far from unchanged levels in early U.S. trading Wednesday, after hitting multi-week lows on Tuesday. The two metals markets are still feeling heavy amid the recent rally in the U.S. dollar index, wobbly crude oil prices and rising bond yields. April gold futures were last down $0.80 at $1,683.10 and May Comex silver was last down $0.047 at $24.095 an ounce.
The just-released U.S. ADP national employment report for March showed a jobs gain of 517,000, which is in line with expectations of a gain of 525,000 jobs and compares to 117,000 jobs gained in February. This report is the precursor to the more important U.S. employment situation report from the Labor Department on Friday, which is expected to show March non-farm payrolls gaining 675,000 jobs following a rise of 379,000 in February. The unemployment rate is seen at 6.0%. Markets showed little reaction to the ADP report.
Global stock markets were flat to narrowly mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Wednesday is the last trading day of the month and of the quarter, which is an extra important trading day from a technical chart perspective and also sees many portfolio managers doing some window dressing.
President Biden is set to unveil Wednesday the first of two expected portions of the next phase of his U.S. economic agenda. That package is expected to cost at least $2 trillion. The plan likely includes tax hikes for higher-income Americans and businesses.
In overnight news, the Euro zone March consumer price index came in at up 1.3%, year-on-year, versus up 0.9% in February. These numbers are not at all suggestive of problematic price inflation.
The key outside markets today see the U.S. dollar index a bit weaker after hitting another 4.5-month high overnight. Nymex crude oil prices are slightly lower and trading around $60.35 a barrel. An OPEC meeting later this week is in focus for the oil market. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.73% after hitting a 14-month high of around 1.75% on Tuesday.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the Chicago ISM business survey, pending home sales and the weekly DOE liquid energy stocks report.
Technically, the April gold futures bears have the solid overall near-term technical advantage and have gained more power this week. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,754.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,673.30. First resistance is seen at $1,700.00 and then at Tuesday’s high of $1,712.60. First support is seen at $1,673.30 and then at $1,660.00. Wyckoff's Market Rating: 2.5
May silver futures bears have the solid overall near-term technical advantage and have gained power this week. Prices are in a two-month-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at the overnight high of $24.22 and then at Tuesday’s high of $24.77. Next support is seen at the overnight low of $23.74 and then at $23.50. Wyckoff's Market Rating: 3.0.