Wednesday April 16, 2014 2:12 PM
(Kitco News) - Gold prices ended the U.S. day session steady to slightly higher Wednesday, on some mild short covering and bargain hunting. The yellow metal is trying to regain its composure and stabilize after suffering a severe beating on Tuesday that turned the near-term technical posture from bullish to bearish. June gold was last up $1.40 at $1,301.70 an ounce. Spot gold was last quoted down $0.80 at $1,302.00. May Comex silver last traded up $0.121 at $19.61 an ounce.
The Federal Reserve’s beige book was released Wednesday afternoon and was not a markets-mover. The report said the U.S. economy sees slight improvement following a fierce winter that crimped economic growth. A U.S. housing starts report released in early trading did not meet market expectations, which did helped lift the gold market.
Fed Chair Janet Yellen also gave a speech in New York Wednesday at midday. However, here remarks were not deemed market-sensitive either.
The Russia-Ukraine crisis remains in keen focus this week. The latest developments have seen gunfire in eastern Ukraine cities, with Russian war planes buzzing the region. The Ukrainian president has ordered his troops to regain control of the cities in eastern Ukraine that had been taken over by pro-Russia rebels. Ukraine government officials have accused Russia of instigating and even arming the protesters. There is uncertainty regarding how the U.S., the world’s only military super power, will react to the latest developments in Ukraine.
As a three-day Easter holiday weekend approaches, it will not be surprising to see the safe-haven assets, including gold, see more demand and to see the market place move into a “risk-off” mode. The Russia-Ukraine crisis could escalate into an international crisis in a hurry.
Key economic data from China on Wednesday saw the world’s second-largest economy grow by 7.4%, year-on-year. That figure was slightly above the 7.3% annual growth rate expected by forecasters but still the slowest growth rate in 18 months. China construction starts in the first quarter fell by 25% and sales of homes fell by 7.7% in the same period. The Asian and European stock markets were supported on the China GDP news. China is the world’s largest consumer of raw commodities. The gold market’s plunge on Tuesday was blamed in part of worries about demand for physical gold coming out of China.
Technically, June gold futures prices closed nearer the session high. Near-term chart damage was inflicted Tuesday and the bears have the near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,331.40. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,277.40. First resistance is seen at Wednesday’s high of $1,307.10 and then at $1,320.00. First support is seen at Wednesday’s low of $1,293.50 and then at this week’s low of $1,284.40. Wyckoff’s Market Rating: 4.0
May silver futures prices closed near mid-range and saw short covering after hitting a 2.5-month low Tuesday. The bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $20.40 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 Wednesday’s high of $19.805 and then at $20.00. Next support is seen at Wednesday’s low of $19.325 and then at this week’s low of $19.22. Wyckoff's Market Rating: 2.0.
May N.Y. copper closed up 445 points at 303.20 cents Wednesday. Prices closed nearer the session high on short covering. Bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 308.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of 287.70 cents. First resistance is seen at Wednesday’s high of 306.20 cents and then at 308.00 cents. First support is seen at 300.00 cents and then at this week’s low of 296.55 cents. Wyckoff's Market Rating: 3.5.
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