Gold Loses Early Gains As U.S. Equities Recover

Date: 08/05/2019

Jim Wyckoff Wednesday May 08, 2019 13:18

Kitco News

(Kitco News) – Gold prices are moderately lower in midday U.S. trading Wednesday. Some safe-haven demand overnight and in early U.S. action gave way to selling pressure tied to a tweet from President Trump that sounded upbeat on a U.S.-China trade deal being reached this week. June gold futures were last down $4.50 an ounce at $1,281.20. July Comex silver was last down $0.071 at $14.855 an ounce.

U.S. stock indexes were solidly lower in overnight trading but quickly recovered those losses when Trump tweeted that China is coming to Washington this week to reach an agreement with the U.S. on trade. This situation is still very much up in the air and the marketplace is still skeptical any deal will get reached this week. However, a deal cannot be ruled out, either, given Trump’s propensity to make knee-jerk moves.

World stock markets were mostly lower in anxious trading overnight. Earlier news reports said China will not agree to the U.S. demands on intellectual property laws.

In other important news Wednesday, Iran’s government said it will stop complying with some commitments it made in the United Nations nuclear deal in 2015. The U.S. pulled out of the agreement last year and put more sanctions on Iran—namely it’s oil exports. This week the U.S. sent a naval task force to the Persian Gulf, including an aircraft carrier, due to what the U.S. said were threats against the U.S. in the region.

China reported today its exports showed a surprising drop of 2.7% in April, year-on-year, compared to a 14.2% gain in March. China’s imports rose 4.0% in the same period. This economic data seems to
underscore the damage to China’s economy from several months of U.S. tariffs on Chinese imports.

The key “outside markets” today see the U.S. dollar index trading near steady. Meantime, Nymex crude oil prices are firmer and trading just above $62.00 a barrel.

Technically, June gold futures prices closed near the session low after hitting a three-week high early on today. The bears have the overall near-term technical advantage. A 2.5-month-old downtrend is still in place on the daily bar chart. 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 today’s high of $1,292.80 and then at $1,300.00. First support is seen at this week’s low of $1,278.10 and then at $1,275.00. Wyckoff’s Market Rating: 3.5.

July silver futures prices closed nearer the session low today. The silver bears have the firm overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at $15.00 and then at $15.15. Next support is seen at this week’s low of $14.77 and then at last week’s low of $14.57. Wyckoff’s Market Rating: 3.0.

July N.Y. copper closed down 120 points at 277.35 cents today. Prices closed nearer the session low today. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 291.35 cents. The next downside price objective for the bears is closing prices below solid technical support at 270.00 cents. First resistance is seen at today’s high of 281.00 cents and then at this week’s high of 284.85 cents. First support is seen at today’s low of 276.00 cents and then at this week’s low of 274.15 cents. Wyckoff’s Market Rating: 5.0.

By Jim Wyckoff