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Gold, Silver Sharply Up Amid Bullish Outside Markets

Kitco News

(Kitco News) - Gold and silver prices are sharply higher in early U.S. trading Thursday. The precious metals bulls have been revived after a two-week meltdown in prices. Short covering in the futures markets and bargain hunting in the cash markets are featured following the recent strong selling pressure. A weakening U.S. dollar index and rebounding crude oil prices late this week have helped to rally gold and silver markets. April Comex gold was last up $31.10 an ounce at $1,231.50. May Comex silver was last up $0.562 at $17.48 an ounce.

There are now early technical clues the gold and silver markets have put in near-term bottoms.

Some generally “soft” U.S. economic data just released also plays into the camp of the precious metals market bulls.

World stock markets were also higher Thursday, in the wake of the Wednesday afternoon U.S. interest rate increase from the Federal Reserve. The FOMC raised U.S. interest rates by 0.25% Wednesday, which was fully expected. The marketplace deemed the FOMC statement and Yellen press conference as not being too hawkish on monetary policy, and possibly less aggressive on fighting inflation, which rallied most commodity markets and pressured the U.S. dollar index.

The key outside markets on Thursday morning see the U.S. dollar index trading lower after solid losses posted Wednesday. The dollar index has seen its near-term price uptrend broken this week and the greenback bears now have downside technical momentum. Nymex crude oil prices are higher today on more of a corrective and short-covering bounce after hitting a four-month low Tuesday. The crude oil bears now appear to be exhausted after recent strong selling pressure, which begins to hint at a near-term market bottom being in place.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, and new residential construction.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bears still have the overall near-term technical advantage, but the bulls now have momentum on their side. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,200.00. First resistance is seen at the overnight high of $1,234.00 and then at $1,240.00. First support is seen at $1,225.00 and then at the overnight low of $1,218.10. Wyckoff’s Market Rating: 4.0.

May silver bears also still have the overall near-term technical advantage, but the bulls have momentum on their side. Silver bulls’ next upside price breakout objective is closing futures prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at the overnight high of $17.585 and then at $17.82. Next support is seen at the overnight low of $17.30 and then at $17.00. Wyckoff's Market Rating: 4.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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