Gold Firmer As Crude Oil Stabilizes, Greenback Weaker
(Kitco News) - Gold prices are slightly higher in early U.S. trading Friday, on some short covering by the shorter-term futures traders and as crude oil prices are modestly up following this week’s selling pressure. A weaker U.S. dollar index Friday morning is also a positive for the precious metals markets. August Comex gold was last up $2.00 an ounce at $1,256.50. July Comex silver was last up $0.029 at $16.745 an ounce.
In overnight news, China's central bank injected 250 billion yuan into its financial system—the biggest daily move since mid-January. This loosening of China’s monetary policy comes just two days after the U.S. Federal Reserve tightened its monetary policy. The China news is a bullish underlying element for the precious metals markets. China is the world’s largest raw commodity importer.
Gold bulls are frustrated their safe-haven metal has not had much bullish fundamental news recently, in the form of markets-moving geopolitical events. However, it’s not likely the world geopolitical front will remain so quiet in the coming weeks.
The key “outside markets” on Friday morning see Nymex crude oil futures prices firmer on short covering following selling pressure seen earlier this week. The oil market bears still have the solid overall near-term technical advantage as prices trade well below $50.00 a barrel. Meantime, the U.S. dollar index is a bit weaker today on some chart consolidation after this week’s good gains. The greenback bears still hold the overall near-term technical advantage.
U.S. economic data due for release Friday includes new residential construction and the University of Michigan consumer sentiment survey.
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Technically, August gold futures bulls still have the slight overall near-term technical advantage but have faded and need to show fresh power soon. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,284.20. Bears' next near-term downside price breakout objective is closing prices below solid technical support at $1,225.00. First resistance is seen at $1,260.00 and then at Thursday’s high of $1,268.50. First support is seen at this week’s low of $1,252.70 and then at $1,250.00. Wyckoff’s Market Rating: 5.5
July silver bears have the overall near-term technical advantage as prices hit a three-week low Thursday. The next upside price breakout objective is closing futures prices above solid technical resistance at the June high of $17.745 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $16.06. First resistance is seen at $17.00 and then at $17.215. Next support is seen at this week’s low of $16.62 and then at $16.50. Wyckoff's Market Rating: 4.0.