(Kitco News) – Gold and silver prices are firmer in early U.S. trading Friday, on some mild safe-haven demand amid concerns about slowing world economic growth. April gold futures were last up $4.80 an ounce at $1,312.30. May Comex silver was last up $0.023 at $15.46 an ounce.
Asian shares were mostly firmer overnight and European stocks were mostly lower. U.S. stock indexes are also pointed toward lower openings when the New York day session begins.
There was more downbeat economic data coming out of the European Union Friday. The Markit purchasing managers’ composite index (PMI) for the Euro zone came in at 51.3 in March from 51.9 in February. The February reading was lower than expected. The Eurozone manufacturing PMI in March was 47.6 versus 49.3 in February. Euro zone workhorse Germany saw its manufacturing PMI fall to 44.7 in March from 47.6 in February. A number above 50.0 suggests growth in the sector. A reading below 50.0 indicates contraction in the sector. The European Central Bank recently adopted an easier monetary policy to stimulate economic growth in the Euro zone.
Friday the U.S. Treasury yield curve has inverted (higher shorter-term yields than longer-term yields across the maturity spectrum), which historically suggests an economic recession is looming.
The key outside markets today see the U.S. dollar index higher on a strong rally after hitting a six-week low on Wednesday. The USDX initially sold off following the surprisingly dovish FOMC statement. Then, apparently, traders reckoned that even a slowing U.S. economy and stable U.S. interest rates still makes the U.S. dollar the most robust currency in the world. Ironically, gold is benefitting from the strong greenback on notions the periphery world currencies will struggle in the coming months due to easier monetary policies of the Federal Reserve and European Central Bank, as well as the strong dollar.
Meantime, Nymex crude oil prices are lower and trading around $59.50 a barrel. Oil prices hit a four-month high Thursday.
In other overnight news, European Union leaders voted to allow the U.K. to postpone its Brexit that was set to occur next week. The U.K. Parliament is likely to vote on a new “soft” Brexit deal next week.
U.S. economic reports due for release Friday includes the flash services and manufacturing purchasing managers indexes, monthly wholesale trade, existing home sales, and the monthly Treasury budget statement.
Technically, the gold bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the January high of $1,331.30. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,280.80. First resistance is seen at this week’s high of $1,320.20 and then at $1,325.00. First support is seen at the overnight low of $1,306.50 and then at $1,300.00. Wyckoff’s Market Rating: 7.0
May silver futures bulls have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $14.985. First resistance is seen at this week’s high of $15.65 and then at $15.75. Next support is seen at Thursday’s low of $15.38 and then at this week’s low of $15.22. Wyckoff’s Market Rating: 6.5.
By Jim Wyckoff
For Kitco News