(Kitco News) – Gold prices are modestly higher in early-afternoon U.S. trading Wednesday, on a tepid short-covering and bargain-hunting rebound following recent strong selling pressure that pushed the market to a five-week low earlier this week. April gold futures were last up $1.70 an ounce at $1,286.40. May Comex silver was last down $0.02 at $15.085 an ounce.
The just-released “beige book” from the Federal Reserve showed 10 of the 12 district banks reporting slight-to-moderate economic growth, with two districts showing flat growth. The government shutdown in late-December/early January weighed a bit on the economy, as has the harsh winter weather in some regions of the country. U.S. manufacturers are worried about global demand weakening, due in part to the U.S.-China trade dispute. Residential construction has been mostly steady, but home sales have slipped, the district banks said. The U.S. labor market remains tight, with worker shortages curbing employment growth in some areas. Wages are on the rise, but only modestly to moderately, the beige book reported. The report had little impact on the markets.
Earlier today, the ADP national employment report for February showed a rise of 183,000, which was close to market expectations for a rise of 185,000. The markets showed little reaction to the report.
Gold prices were modestly supported by weaker U.S. stock index prices today. Some downbeat U.S. trade data that showed the largest overall trade deficit ever in December did work to pressure the stock market.
Attention of the marketplace is turning to the European Central Bank’s regular monetary policy meeting on Thursday. The ECB is expected to loosen its purse strings and provide more low-interest financing to Euro zone banks in order to stimulate an anemic Euro zone economy.
The U.S. March jobs report from the Labor Department is due out Friday morning. That’s arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 180,000.
The key outside markets today see the U.S. dollar index near steady. The greenback bulls have regained technical strength recently. Nymex crude oil prices are lower and trading around $56.00 a barrel.
Technically, April gold futures prices closed near mid-range today. The bulls and bears are on a level overall near-term technical playing field. The gold market is still short-term oversold and due for more of a corrective bounce soon. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,275.00. First resistance is seen at today’s high of $1,291.80 and then at this week’s high of $1,298.10. First support is seen at the January low of $1,281.50 and then at $1,275.00. Wyckoff’s Market Rating: 5.0
May silver futures prices closed nearer the session low and hit another nine-week low today. The silver bears have the overall near-term technical advantage. However, the market is short-term oversold, technically. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at this week’s high of $15.295 and then at $15.40. Next support is seen at $15.00 and then at $14.85. Wyckoff’s Market Rating: 4.0.
May N.Y. copper closed down 135 points at 292.00 cents today. Prices closed nearer the session low today. The copper bulls have the overall near-term technical advantage. Prices have been trending higher for two months. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 275.00 cents. First resistance is seen at this week’s high of 295.50 cents and then at the February high of 297.75 cents. First support is seen at this week’s low of 289.65 cents and then at 287.25 cents. Wyckoff’s Market Rating: 6.5.
By Jim Wyckoff
For Kitco News