(Kitco News) - Gold prices are posting very strong gains in midday U.S. trading Wednesday, as the U.S. stock market has rebounded from selling pressure seen on Monday and Tuesday, while crude oil prices are also posting solid advances at mid-week. Remember that recently the gold market has had good rallies in tandem with stocks. Reason: The world economic outlook remains very uncertain amid the Covid-19 pandemic that has done so much damage to global commerce, and when stocks rally buyers of the yellow metal have more courage to step up, as opposed to the fear of trading any market when equities are tanking. There also could be some safe-haven demand amid talk some Asian investors and financial markets have been badly hurt by the collapse in crude oil prices this week. June gold futures were last up $49.50 an ounce at $1,737.30. May Comex silver prices were last up $0.374 at $15.25 an ounce.
Global stock markets were mostly up in overnight trading. U.S. stock indexes are higher in midday New York trading. The U.S. stock indexes are seeing a corrective bounce at mid-week, following solid losses scored on Monday and Tuesday. The U.S. equity traders are watching corporate earnings reports that have started to come out this week, but have so far been mostly overshadowed by the collapse in the global crude oil market.
The marketplace showed a somewhat delayed reaction to a tweet from President Trump Wednesday morning that said, “I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” A while after the tweet, gold prices slightly extended gains, while crude oil prices rallied. It could be that both gold and crude were reacting more to the rally in the stock market than the tweet. That’s unclear. Still, the U.S.-Iran tensions were escalated by Trump’s tweet and those tensions will likely get worse before they get better and merit the close attention of traders and investors.
This week’s stunning and historic trading action in crude oil futures, in which the just- expired May Nymex contract fell deep into negative price territory but recovered to around $10 a barrel by its expiry, and which has seen Brent crude oil futures fall below $20 a barrel and hit a 21-year low, has possibly caused some oil-based exchange traded funds (ETFs) to be at or near a state of total failure. Speculation in the marketplace at present is that Asian investors have been hit the hardest—so hard that some Asian financial markets could experience a contagion effect and implode, themselves. So far this is just speculation. What was so ironic for this veteran markets reporter on Monday and Tuesday was the eerie calm in the foreign exchange markets, amid the storm of an unprecedented meltdown in the global oil market—arguably the most fungible commodity market in the world. The Russian ruble has been dinged, but the FOREX “majors” appear to have paid little attention to the matter. However, if Asian financial markets become keenly distressed the FOREX majors will wake up in a hurry. Of note, Hong Kong’s de-facto central bank, the Hong Kong Monetary Authority, on Wednesday implemented a temporary U.S. dollar-liquidity facility for the city-state’s banks. The move allows holders of U.S. Treasuries to borrow greenbacks against their Treasury holdings. The action could be tied to crude oil’s severe price declines this week and could be a precursor for some rough waters just ahead in the Asian financial markets.
Oil prices are solidly higher today, with Nymex West Texas Intermediate (WTI) June futures trading up around $2.50 at $11.50. The other important outside markets today see the U.S. dollar index firmer. The 10-year U.S. Treasury note yield is trading around 0.58% today.
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2924175530478188){kind=small}
Technically, June gold futures bulls have the solid overall near-term technical advantage and gained more power today by keeping alive a price 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 the April high of $1,788.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of $1,666.20. First resistance is seen at today’s high of $1737.00 and then at $1,750.00. First support is seen at $1,700.00 and then at today’s low of $1,695.40. Wyckoff's Market Rating: 8.0
![Live 24 hours silver chart [ Kitco Inc. ]](https://www.kitco.com/images/live/silver.gif)
May silver futures bulls have the slight overall near-term technical advantage. However, a four-week-old uptrend on the daily bar chart is still in jeopardy. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the April high of $16.30 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.00. First resistance is seen at Tuesday’s high of $15.56 and then at this week’s high of $16.69. Next support is seen at today’s low of $14.775 and then at this week’s low of $14.56. Wyckoff's Market Rating: 5.5.
May N.Y. copper closed up 600 points at 229.00 cents today. Prices closed near the session high today. The copper bears have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 235.80 cents. The next downside price objective for the bears is closing prices below solid technical support at 210.00 cents. First resistance is seen at 230.00 cents and then at this week’s high of 235.80 cents. First support is seen at 225.00 cents and then at today’s low of 221.05 cents. Wyckoff's Market Rating: 4.5.
