(Kitco News) - Gold prices are lower in early U.S. trading Wednesday, but have moved up from overnight lows following some downbeat U.S. economic data just out. Silver prices are sharply down. June gold was last down $34.90 at $3,299.50. May silver prices were last down $1.10 at $32.175.
The just-released ADP national employment report for April was a big downside miss, showing a gain of 62,000 jobs versus expectations for up 120,000. Also, the first-quarter U.S. GDP number came in at down 0.3% versus expectations for a rise of 0/4%, quarter-on-quarter. These numbers fall into the camp of the monetary policy doves, who want the Federal Reserve to lower U.S. interest rates sooner rather than later.
Asian and European stock markets were mixed to firmer in overnight trading. U.S. stock indexes are pointed to lower openings today in New York. Broker SP Angel writes the stock markets “have settled into a state of calm” as U.S. Treasury yields have dipped and the volatility index (VIX) has also declined. This is putting strong selling pressure on the safe-haven gold market at mid-week. The key question yet to be answered is: Has the worst of the trade-tariff anxiety in the marketplace passed? If the answer turns out to be yes, then the global stock markets have put in major bottoms. If the answer is no, then a more dour scenario of prolonged stock market weakness and even global economic recession becomes more likely.
China’s economy is starting to feel the effects of the trade war with the U.S. China’s new export orders plummeted in April to the lowest levels since the pandemic, with overall manufacturing activity the weakest in more than a year. Dow Jones Newswires reports, “The sharp pullback shows Trump’s eye-watering tariffs on Chinese imports are starting to squeeze the engine room of China’s economy, piling pressure on Beijing to boost its stimulus efforts to shore up growth.”
The key outside markets today and see the U.S. dollar index slightly higher. Nymex crude oil futures prices are weaker and trading around $59.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.17%.
A busy slate of U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the first estimate of first-quarter GDP, the employment cost index, the Chicago ISM business survey, pending home sales, personal income and outlays and the weekly DOE liquid energy stocks report.
Technically, June gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,509.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at this week’s high of $3,363.80 and then at last Friday’s high of $3,384.10. First support is seen at $3,300.00 and then at last week’s low of $3,270.80. Wyckoff's Market Rating: 7.0.
May silver futures bulls have the firm overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $35.00. The next downside price objective for the bears is closing prices below solid support at $32.00. First resistance is seen at last week’s high of $33.69 and then at $34.00. Next support is seen at this week’s low of $32.585 and then at $32.00. Wyckoff's Market Rating: 7.0.
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