Tuesday April 1, 2014 8:21 AM
(Kitco News) - Gold prices are hovering around unchanged in subdued U.S. dealings early Tuesday, after dropping to a seven-week low in overnight trade. Traders and investors are awaiting a busy day of U.S. economic releases. June gold was last up $1.40 at $1,285.20 an ounce. Spot gold was last quoted up $0.70 at $1,286.00. May Comex silver last traded up $0.028 at $19.78 an ounce.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the U.S. manufacturing PMI, construction spending, the IBD/TIPP economic optimism index, the global services PMI, domestic auto sales, and the ISM manufacturing report. Traders and investors are also awaiting the U.S. jobs report on Friday—arguably the most important U.S. economic report of the month.
In overnight news, China’s manufacturing purchasing managers’ index (PMI) rose for the first time in six months, coming in at 50.3 in March versus 50.2 in February. However, the similar Markit-HSBC survey showed the China PMI coming in at 48.0 in March from 48.5 in February. These two reports ostensibly cancelled each other out.
In the European Union, the Markit manufacturing PMI came in at 53.0 in March from 53.2 in February. While EU manufacturing activity has expanded for nine months running, the worrisome part of the Markit report was that some manufacturers were starting to drop their prices for their goods. The European Central Bank is worried about deflation setting in for the EU and could act soon to provide further monetary policy stimulus. The monthly ECB monetary policy meeting is Thursday.
The European and Asian stock markets received upside support Tuesday, following the lead of the U.S., after perceived dovish comments from Federal Reserve Chair Janet Yellen on Monday. Yellen spoke at a gathering in Chicago and said the U.S. central bank needs to keep interest rates extremely low to prop up the still very shaky U.S. jobs market.
Russia’s annexation of the Crimea region of Ukraine remains a geopolitical tension, but not quite a front-burner markets issue at this time.
Wyckoff’s Daily Risk Rating: 5.0 (The Ukraine situation has for the moment de-escalated.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.
The London A.M. gold fix is $1,286.50 versus the P.M. fixing of $1,291.75.
Technically, June Comex gold bears have the firm overall near-term technical advantage and still have momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below technical support at $1,250.00. First resistance is seen at the overnight high of $1,288.40 and then at $1,300.00. First support is seen at the overnight low of $1,277.40 and then at $1,270.00.
May silver futures bears have the firm near-term technical advantage. A five-week-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 $20.63 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.00. First resistance is seen at the overnight high of $19.91 and then at Monday’s high of $20.01. Next support is seen at the overnight low of $19.635 and then at last week’s low of $19.575.
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