NEW YORK ( TheStreet) -- Gold prices were popping Wednesday as gold shorts swiftly moved to cover their positions as weaker-than-expected U.S. economic data forced them to reconsider riskier assets such as stocks.
Gold for August delivery at the COMEX division of the CME was jumping $6.30 to $1,403.50 an ounce. The gold price traded as high as $1,409 and as low as $1,395.10, while the spot price was tacking on $7.30, according to Kitco's gold index. This, as the S&P 500 fell 0.84%.
"The numbers that have been coming out gave all these shorts pause," said Miguel Perez-Santalla, vice-president of business development at BullionVault in New York. "They're concerned that maybe they're wrong. I'm not saying they're going long, but they're getting out of their gold shorts."
"Gold has rediscovered its negative correlation with stocks, and that's working in its favor right now," added Adrian Ash, head of research at BullionVault in London. "Today's poor reading on the ADP jobs report means dollar weakness is also supporting gold prices. But the big event remains Friday's official non-farms data."A spate of worse-than-expected economic reports flooded the market Wednesday, including the May ADP private payroll employment report, April factory orders, and revised first-quarter unit labor costs. While the composite index from the ISM non-manufacturing survey showed a greater-than-estimated increase in May and reflected solid gains in business activity, new orders, and supplier delivery, they were offset by a decline in the employment component of the report. Perez-Santalla said he's now expecting downside support of $1,373, so a break of $1,373 could see gold futures slide lower. Meanwhile a break of $1,423 on the top side could see gold move higher. Silver for July delivery was rising 19 cents to $22.59 an ounce. Gold ETF SPDR Gold Trust (GLD) was up 0.36% at $135.73 while the iShares Gold Trust (IAU) was rising 0.44% to $13.64. Gold mining stocks were trading higher Wednesday. Gold Fields (GFI - Get Report) was rising 0.32% to $6.18 and Yamana Gold (AUY - Get Report) was ticking up 0.34% to $11.84. Barrick Gold (ABX - Get Report) was gaining 0.62% to $20.99. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.