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

(Kitco News) - Gold prices aremodestly up in early afternoon U.S. trading Wednesday, but well off sessionhighs as the U.S. stock market posts a dramatic rebound from the lows seenearlier 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.

Fearsof a global trade war have ratcheted up a notch after China today announced abig list of U.S. products on which it intends to slap new tariffs. Theseproducts 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 Trumptweeted Wednesday morning that the U.S. lost the trade war with China yearsago, which underscores the U.S. resolve on the matter. While the U.S. and Chinahave said they will begin negotiations to resolve their trade dispute, thistit-for-tat action has the world marketplace experiencing anxiety as theworld’s number-one and number-two economies square off.

Worldstock markets were lower overnight. U.S. stock indexes opened sharply loweropenings when the New York day session began. However, as midday approached thestock indexes had rebounded dramatically and were trading near their dailyhighs. However, it’s entirely possible the U.S. stock market could sell offtoward the end of the trading day. Gold prices, for the near term, will likelytrade in an inverse relationship with the U.S. stock indexes.

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

Thekey “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 abarrel.

Technically,Junegold futures bulls have the overall near-term technical advantage, buttrading has been choppy recently. Gold bulls' next upside near-term pricebreakout objective is to produce a close above solid technical resistance atthe February high of $1,375.50. Bears' next near-term downside price breakoutobjective 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 atthe March high of $1,362.60. First support is seen at today’s low of $1,335.20and then at $1,325.40. Wyckoff's Market Rating: 6.0

May silver futures bulls and bears are on a level overall near-term technicalplaying field amid a choppy trading range that has been in place for weeks.Silver bulls' next upside price breakout objective is closing prices abovesolid technical resistance at $17.00 an ounce. The next downside price breakoutobjective for the bears is closing prices below solid support at $16.00. Firstresistance 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 Marchlow of $16.10. Wyckoff's Market Rating: 5.0.

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

By Jim Wyckoff

For Kitco News

Follow @jimwyckoffjwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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