Gold Firmer, But Rebounding U.S. Stocks Pare Gains

(Kitco News) - Gold prices are modestly up in early afternoon U.S. trading Wednesday, but well off session highs as the U.S. stock market posts a dramatic rebound from the lows seen earlier in the session. June Comex gold futures were last up $3.00 an ounce at $1,340.50. May Comex silver was last down $0.117 at $16.28 an ounce.

Fears of a global trade war have ratcheted up a notch after China today announced a big list of U.S. products on which it intends to slap new tariffs. These products include cars, soybeans and airplanes. This action follows a U.S. announcement of new U.S. duties on Chinese imports on Tuesday. U.S. President Trump tweeted Wednesday morning that the U.S. lost the trade war with China years ago, which underscores the U.S. resolve on the matter. While the U.S. and China have said they will begin negotiations to resolve their trade dispute, this tit-for-tat action has the world marketplace experiencing anxiety as the world’s number-one and number-two economies square off.

World stock markets were lower overnight. U.S. stock indexes opened sharply lower openings when the New York day session began. However, as midday approached the stock indexes had rebounded dramatically and were trading near their daily highs. However, it’s entirely possible the U.S. stock market could sell off toward the end of the trading day. Gold prices, for the near term, will likely trade in an inverse relationship with the U.S. stock indexes.

Wednesday’s U.S. ADP national employment report showed a rise of 241,000 in March, which was a significant miss to the upside. Forecasters were expecting the number to come in at up 200,000. This report is a precursor to Friday morning’s more important U.S. employment situation report from the Labor Department. Gold prices did back off from their daily highs after this report’s release.

The key “outside markets” on Wednesday afternoon see the U.S. dollar index weaker. Meantime, Nymex crude oil prices are slightly lower and trading above $63.00 a barrel.

Technically, June gold futures bulls have the overall near-term technical advantage, but trading has been choppy recently. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,375.50. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,309.30. First resistance is seen at today’s high of $1,352.50 and then at the March high of $1,362.60. First support is seen at today’s low of $1,335.20 and then at $1,325.40. Wyckoff's Market Rating: 6.0

May silver futures bulls and bears are on a level overall near-term technical playing field amid a choppy trading range that has been in place for weeks. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at today’s high of $16.515 and then at last week’s high of $16.81. Next support is seen at last week’s low of $16.34 and then at the March low of $16.10. Wyckoff's Market Rating: 5.0.

May N.Y. copper closed down 500 points at 301.35 cents today. Prices closed near mid-range today. The copper bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 315.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the September low of 293.25 cents. First resistance is seen at 305.00 cents and then at this week’s high of 307.25 cents. First support is seen at today’s low of 297.00 cents and then at last week’s low of 293.75 cents. Wyckoff's Market Rating: 4.0.