• 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.
• Spot gold <XAU=> was down 0.3 percent at $1,265.21 an ounce by 3:09 p.m. EDT (1909 GMT), while U.S. gold futures <GCcv1> settled up 0.1 percent at $1,265.90.
• Gold has fallen 1.5 percent this week as it slipped from a April 17 high of $1,295.42.
• On Wednesday, gold prices bounced up from a two-week low after Trump proposed slashing the U.S. tax rate on corporate profits.
• Ole Hansen, head of commodities strategy at Saxo Bank, said the gold market was going through a correction phase, with several broad factors that had driven prices higher fading. "We've seen a strong rally in stocks and U.S. bond yields move up again, and we have almost had a day without North Korea being mentioned," he said.
• Investors traditionally use gold as a hedge against political uncertainty, while rising stock prices and higher yields increase the opportunity cost of holding non-yielding bullion.
• Analysts at Mitsubishi and MKS PAMP said that technical support would come in at about $1,257, the first Fibonacci retracement from a recent rally, and the 200-day moving average, currently $1,252.50.
• Bullion has been supported by physical demand. Data on Thursday showed Swiss gold exports to Hong Kong, China and India rose in March, while Chinese gold production fell in the first quarter. But consumption in China and India traditionally declines in the second quarter, said Mitsubishi analyst Jonathan Butler, potentially pushing prices lower.
• Faster economic growth or more detail on Trump's tax plans could also promp investors to move money from bullion to higher-yielding assets, Butler said.
• 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
• In other precious metals, silver <XAG=> was down 0.8 percent at $17.32 an ounce, after falling to $17.21, the lowest since March 17.
• 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.
Reference: Reuters, Kitco
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