Gold sees more short covering, perceived bargain hunting
Gold prices are higher and silver slightly up in midday U.S. trading Wednesday. Short covering from the shorter-term futures traders and perceived bargain buying by the staunch bulls are featured after gold hit a nine-week low on Tuesday and silver a nearly four-month low. Sharp losses in the U.S. dollar index at midweek are also supporting buying interest in the metals markets. April gold was last up $8.70 at $1,845.20 and May silver was up $0.029 at $21.10.
U.S. stock indexes are mixed at midday. Risk appetite is not keen to start the new trading month, but neither is risk aversion. An underlying current in the marketplace recently has been notions China’s economic growth will surge this year. A Wall Street Journal article this morning has the headline: “China’s economy seen emerging from zero-Covid shadow.” However, the deteriorating political relations between the U.S. and China have pushed the world’s two largest economies very close to a cold war that could at least partially offset the benefits to the global marketplace of a stronger China economy.
The key outside markets see the U.S. dollar index solidly lower. Nymex crude oil futures prices are lower and trading around $76.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.985%. Bond yields are on the rise, which is a bearish element for the gold and silver markets.
Technically, April gold futures bears still have the slight overall near-term technical advantage. A price downtrend is in place on the daily chart, but now just barely. Bulls’ next upside price objective is to produce a close above solid resistance at $1,881.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,852.50 and then at $1,865.00. First support is seen at today’s low of $1,829.60 and then at $1,820.00. Wyckoff's Market Rating: 4.5.
May silver futures prices hit a nearly four-month low Tuesday. The silver bears have the overall near-term technical advantage. Prices are in a steep downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $22.25. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at today’s high of $21.285 and then at $21.52. Next support is seen at this week’s low of $20.505 and then at $20.25. Wyckoff's Market Rating: 3.5.
March N.Y. copper closed up 625 points at 416.00 cents today. Prices closed near the session high today. The copper bulls have the firm overall near-term technical advantage and have momentum. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 435.50 cents. The next downside price objective for the bears is closing prices below solid technical support at the February low of 393.45 cents. First resistance is seen at 420.00 cents and then at the February high of 423.70 cents. First support is seen at today’s low of 411.00 cents and then at 405.00 cents. Wyckoff's Market Rating: 6.5.