Gold Sees Mild Corrective Rebound From 5-Week Low
(Kitco News) - Gold prices are slightly higher in early U.S. trading Friday, on a modest corrective bounce from selling pressure that drove prices to a five-week low overnight. A solid rally in the U.S. dollar index this week is still squelching buying interest in the precious metals. June Comex gold futures were last up $1.10 an ounce at $1,319.30. May Comex silver was last down $0.026 at $16.465 an ounce.
The highlight of the U.S. economic data points this week is today’s advance first-quarter GDP report, which came in at a better-than-expected up 2.3%. Forecasters were expecting GDP to show a rise of 1.8% versus up 2.9% in the fourth quarter of last year. The gold market ticked down just a bit right after the GDP report, but then returned to modestly higher price levels seen just before its release.
World stock markets were mostly higher overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Strong corporate earnings reports coming out of the U.S. late this week are helping the stock market bulls. A decline in government bond yields late this week is also a bullish development for equities.
In overnight news, a meeting between North Korean and South Korean officials, including North Korea’s Kim Jong Un and South Korean President Moon Jae-in made dramatic progress, with a peace treaty signed declaring the end of the Korean War that was fought 65 years ago. This shocking development has many wondering if Kim Jong Un is sincere.
The U.K.’s gross domestic product grew only 0.1% in the first quarter, which is the slowest growth rate for the country in five years.
The key “outside markets” on Friday morning see the U.S. dollar index trading higher and hitting another 3.5-month high overnight. Meantime, Nymex crude oil prices are weaker and trading just below $68.00 a barrel.
U.S. economic data due for release Friday includes the employment cost index, the advance first-quarter GDP estimate, and the University of Michigan consumer sentiment survey.
Technically, June gold bulls still have the overall near-term technical advantage, but have faded and need to show fresh power soon to avoid more serious chart damage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,309.30. First resistance is seen at today’s high of $1,323.00 and then at Thursday’s high of $1,328.00. First support is seen at today’s low of $1,315.80 and then at $1,312.40. Wyckoff's Market Rating: 6.0
May silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the April high of $17.36 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $16.10. First resistance is seen at Thursday’s high of $16.58 and then at $16.75. Next support is seen at this week’s low of $16.385 and then at $16.25. Wyckoff's Market Rating: 5.0.