(Kitco News) - Safe-haven gold prices are seeing moderate selling pressure in early U.S. trading Wednesday. There is less risk aversion in the marketplace on this day, which is keeping the yellow metal bulls on the defensive. A firmer U.S. dollar index today is also a negative for the precious metals markets. June Comex gold was last down $7.30 at $1,222.30 an ounce. May Comex silver was last down $0.096 at $15.02 an ounce.
World stock markets stabilized Wednesday following recent selling pressure. Equities markets were buoyed as China got some upbeat economic data Wednesday when the Caixin purchasing managers’ index (PMI) came in at 52.2 in March from 51.2 in February. A reading above 50.0 suggests expansion in the sector. A short-covering and bargain-hunting bounce in crude oil prices Wednesday also put some risk appetite back into the marketplace. Crude prices hit a four-week low on Tuesday. Nymex crude oil prices were hovering near $37.00 a barrel in early U.S. trading. U.S. stock indexes were pointed toward slightly higher openings when trading gets under way in New York.
The other key “outside market” on Wednesday finds the U.S. dollar index higher on a corrective bounce from recent selling pressure that drove the greenback to a seven-month low last week.
Traders and investors are awaiting Wednesday afternoon’s release of the minutes from the latest FOMC meeting. That’s the big U.S. data point of the day.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, and the weekly DOE liquid energy stocks report. Several Federal Reserve officials also speak Wednesday.
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Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(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 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
Technically, June gold futures bulls have the overall near-term technical advantage. However, prices are in a three-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at the overnight high of $1,233.80 and then at this week’s high of $1,238.80. First support is seen at this week’s low of $1,215.70 and then at the overnight low of $1,210.30. Wyckoff’s Market Rating: 6.0
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff