Gold Sees Modest Bounce On Bargain Hunting, Short Covering

Jim Wyckoff  

hursday April 27, 2017 13:29

(Kitco News) - Gold prices were ending the U.S. day session firmer on a corrective rebound from this week’s selling pressure that pushed prices to a two-week low on Wednesday. Some short covering by the shorter-term futures traders was featured, as well as some perceived bargain-basement buying in both futures and the cash market. The generally upbeat trader and investor attitudes this week have been a significantly bearish element for the safe-haven metal. The silver market has fared worse that gold recently as prices fell to a five-week low Thursday and significant near-term technical damage has been inflicted. June Comex gold was last up $2.10 an ounce at $1,266.30. May Comex silver was last down $0.078 at $17.285 an ounce.

Gains in the gold market were limited by a higher U.S. stock market again Thursday, with the major averages trading near record highs.

Traders and investors are awaiting what is arguably the most important data point of the week: Friday’s U.S. advance first-quarter gross domestic product report. First-quarter GDP is expected to come in at up 1.0% from the fourth quarter of last year.

The key outside markets on Thursday saw the U.S. dollar index trade slightly higher on a tepid bounce after hitting a 5.5-month low earlier this week. The greenback bears have the overall near-term technical advantage. Meantime, Nymex crude oil prices were lower and hit a three-week low today.

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Technically, June gold futures prices closed near mid-range today. The gold bulls still have the slight overall near-term technical advantage but need to show more power soon to keep it. 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 $1,250.00. First resistance is seen at $1,275.00 and then at this week’s high of $1,280.00. First support is seen at this week’s low of $1,262.30 and then at 1,250.00. Wyckoff's Market Rating: 5.5

May silver futures prices closed nearer the session low and hit another five-week low. The silver market bears have the overall near-term technical advantage amid the recent downdraft in prices. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the April high of $18.655 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at today’s high of $17.47 and then at $17.625. Next support is seen at today’s low of $17.29 and then at $17.00. Wyckoff's Market Rating: 4.0.

May N.Y. copper closed up 130 points at 257.55 cents today. Prices closed near mid-range on more tepid short covering. The copper bears still have the slight overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 245.60 cents. First resistance is seen at 260.00 cents and then at 261.15 cents. First support is seen at today’s low of 255.35 cents and then at this week’s low of 253.50 cents. Wyckoff's Market Rating: 4.5.