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Gold, silver post solid rebounds on short covering, bargain buying

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(Kitco News) - Gold and silver prices are posting good gains in midday U.S. trading Wednesday. After gold hit a three-week low Tuesday and silver hit a 3.5-month low overnight, the bulls decided to step in and buy the dip by doing some short covering in futures and bargain hunting in the cash market, on this last trading day of the month and of the quarter. A pullback in the U.S. dollar index today also aided the metals market bulls. April gold futures were last up $24.00 at $1,707.90 and May Comex silver was last up $0.248 at $24.39 an ounce.

Today’s U.S. ADP national employment report for March showed a jobs gain of 517,000, which was 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 higher at midday. 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 unveiled 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 weaker after hitting another 4.5-month high overnight. Nymex crude oil prices are slightly higher and trading around $60.80 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.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bears still have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at this week’s high of $1,732.60. 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 Tuesday’s high of $1,712.60 and then at $1,725.00. First support is seen at $1,700.00 and then at $1,690.00. Wyckoff's Market Rating: 3.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures prices were near the session high. Prices hit a 3.5-month low overnight. The silver bears still have the firm overall near-term technical advantage. 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 Tuesday’s high of $24.77 and then at $25.00. Next support is seen at $24.00 and then at the overnight low of $23.74. Wyckoff's Market Rating: 3.0.

May N.Y. copper closed up 120 points at 399.10 cents today. Prices closed near mid-range today. The copper bulls have the overall near-term technical advantage. However, 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 420.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 384.90 cents. First resistance is seen at this week’s high of 408.25 cents and then at 410.50 cents. First support is seen at last week’s low of 394.20 cents and then at 390.00 cents. Wyckoff's Market Rating: 6.5.

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.