(Kitco News) – Gold prices are modestly higher in early-morning U.S. trading Friday. Some more mild safe-haven demand is featured late this week as there are a few geopolitical matters in play, but none are presently rattling traders’ cages too badly. June gold futures were last up $2.20 an ounce at $1,287.40. July Comex silver was last up $0.022 at $14.795 an ounce.
Focus in early U.S. trading today is on the just-released U.S. consumer price index report for April, which came in at up 0.3% from March and up 2.0%, year-on-year. The CPI report was expected to come in at up 0.4% from March and up 2.1%, year-on-year. A theme in the world marketplace in recent months has been very tame inflation coming out of the major economies.
World stock markets were mostly up overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
There was no eleventh-hour trade agreement reached between the U.S. and China late Thursday. Increased U.S. tariffs on imported Chinese goods went into effect at midnight last night. China has vowed retaliation. Interestingly, China’s stock market posted a solid rally Friday after this news. It could be a classic case of “sell the rumor, buy the fact” regarding the matter. The U.S.-China trade talks will continue in Washington today. It could also be that the Asian stock market rally Friday was due in part to optimism a deal can be reached soon, as the two sides are still talking. Also, President Trump said China President Xi sent him a “beautiful letter” this week and that the two may talk soon on the matter.
The U.S.-China trade conflict has this week mostly overshadowed another potential geopolitical flashpoint. Iran’s government said this week it will stop complying with some commitments it made in the United Nations nuclear deal in 2015. The U.S. has a naval task force steaming to the Persian Gulf, including an aircraft carrier, due to what the U.S. says are threats against the U.S. in the region.
Also, North Korea is reported to be test-firing missiles again, which President Trump says he does not like. This issue could also quickly become a significant markets-mover if it escalates.
The key “outside markets” today see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are firmer and trading just below $62.00 a barrel.
Other U.S. economic data due for release Friday includes real earnings, and the monthly Treasury budget statement.
Technically, the gold bears have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. 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 $1,250.00. First resistance is seen at this week’s high of $1,292.80 and then at $1,300.00. First support is seen at the overnight low of $1,283.90 and then at this week’s low of $1,278.10. Wyckoff’s Market Rating: 3.5
July silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at $15.00 and then at $15.15. Next support is seen at this week’s low of $14.705 and then at the May low of $14.57. Wyckoff’s Market Rating: 3.0.
By Jim Wyckoff
For Kitco News