Gold Loses Early-Session Gains Amid Rebounding USD

(Kitco News) - Gold prices ended the U.S. day session near steady levels Thursday. An early “buy-the- dip” bounce following recent profit-taking selling pressure gave way to renewed selling interest as today’s session progressed. A rebound in the U.S. dollar index has been a bearish element for the precious metals. June Comex gold futures were last down $0.60 an ounce at $1,273.80. July Comex silver was last up $0.024 at $17.325 an ounce.

The key “outside markets” on Thursday saw the U.S. dollar index again higher on more short covering and bargain hunting after prices hit an eight-month low on Tuesday. If the greenback can post a weekly high close on Friday that would be an early clue that the dollar index has put in a near-term bottom. The rebound in the dollar index has put some selling pressure into raw commodity markets. Meantime, Nymex crude oil prices were higher in afternoon U.S. trading Thursday, but well off the session high and hovering just above $44.00 a barrel. As goes crude oil, so, too, will likely go the raw commodity sector.

Traders and investors are looking ahead to Friday’s U.S. jobs report for April from the Labor Department—arguably the most important U.S. economic report of the month. The key non-farm payrolls number is expected to show a rise of 205,000 in April. However, Wednesday’s weak ADP jobs number (up 156,000) calls into question whether the Friday jobs number can meet expectations. Look for more active trading in the markets in the immediate aftermath of the 8:30 a.m. eastern time release of the report.

Technically, June gold futures prices closed nearer the session low today. The gold bulls still have the firm overall near-term technical advantage, but are now fading and they need to show fresh power soon. Prices are still in a five-week-old uptrend on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,306.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,250.00. First resistance is seen at $1,280.00 and then at today’s high of $1,288.40. First support is seen at $1,270.00 and then at $1,264.70. Wyckoff’s Market Rating: 7.0

July silver futures prices closed nearer the session low today and saw more profit taking. A bearish “key reversal” down has been confirmed on the daily bar chart this week, which is an early technical clue that the silver market has put in a near-term top. The silver market bulls still have the firm overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $18.06 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.80. First resistance is seen at today’s high of $17.685 and then at $17.77. Next support is seen at this week’s low of $17.215 and then at $17.00. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed down 430 points at 214.35 cents today. Prices closed near the session low. The copper bears have the overall near-term technical advantage amid this week’s downdraft. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 225.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of 207.90 cents. First resistance is seen at 217.00 cents and then at today’s high of 219.05 cents. First support is seen at 213.70 cents and then at 212.00 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com