(Kitco News) – Gold prices are modestly down in early-morning U.S. trading Friday, as global stock markets posted end-of-week rebounds from selling pressure seen Thursday. Gold and silver prices did see some safe-haven demand surface Thursday as investor and trader risk appetite shrunk. June gold futures were last down $2.40 an ounce at $1,283.10. July Comex silver prices were last down $0.053 at $14.56 an ounce.
World stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins. Markets were rattled Tuesday as the U.S.-China trade war was ratcheted up yet another notch, as both governments stepped up their rhetoric against each other. The U.S. is also now targeting China’s communications giant, Huawei, for sanctions. A New York Federal Reserve report said the trade war with China will cost Americans an average of $813 a year.
If the U.S. stock market starts to weaken today, look for gold prices to quickly push higher.
In overnight news, U.K. Prime Minister Theresa May said she will resign within two weeks, in order to allow another leader to try to clear up the Brexit mess. Meantime, India’s Prime Minister Modi was a solid victor in his country’s elections.
Parliamentary elections in the U.K. and The Netherlands got under way Thursday, with the populist parties (euroskeptics) possibly doing well. Other European countries’ election results will be announced Sunday. The uncertainty of this matter heading into the weekend will at least limit the selling pressure in gold.
A feature in the marketplace late this week is the dramatic sell off in crude oil prices. Nymex crude oil on Thursday dropped to a low of $57.33 Prices on Tuesday closed at $63.13. Prices have recovered a bit Friday and are trading around $58.50. Plentiful U.S. supplies and worries about slowing world economic growth are mostly to blame for the downdraft in crude prices. The spike down in oil prices is a significantly bearish element for most raw commodity markets, given oil is arguably the leader of the sector.
Meantime, the U.S. dollar index has backed off after scoring a contract and two-year high on Thursday. Technical price action shows a bearish “key reversal” down has occurred in the USDX, which is a chart clue the index has put in a near-term top.
And, world government bond yields are falling this week, on some flight-to-safety buying in U.S. and German bonds, while other countries’ bond prices gained on worries about slowing economic growth keeping interest rates very low.
U.S. economic data due for release Friday includes the advance report on durable goods.
Technically, the gold bears still have the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,267.30. First resistance is seen at this week’s high of $1,287.10 and then at $1,290.00. First support is seen at $1,275.00 and then at Thursday’s low of $1,272.10. Wyckoff’s Market Rating: 4.5.
July silver futures bears still have the solid overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $14.175. First resistance is seen at this week’s high of $14.635 and then at $14.75. Next support is seen at Thursday’s low of $14.40 and then at this week’s low of $14.35. Wyckoff’s Market Rating: 2.5.
By Jim Wyckoff
For Kitco News