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Gold, Silver Bulls Fade As Traders Favoring Paper Assets

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Friday. Gold notched a two-week low, while silver hit a five-week bottom. Despite some geopolitical speed bumps hit this week, traders and investors are presently opting to buy the paper assets (equities) over the hard assets (raw commodities). April gold futures were last down $7.70 an ounce at $1,308.40. May Comex silver was last down $0.074 at $15.56 an ounce.

Asian and European stock markets were mostly up overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins. U.S. stock indexes are near their three-month highs scored earlier this week.
Despite some geopolitical issues this week—U.S. President Trump walking out of the U.S.-North Korea nuclear talks and the India-Pakistan military strikes—traders and investors are mostly upbeat and in the mood to buy stocks. The keener risk appetite in the market place is partly due to notions the U.S. and China—the world’s two largest economies—are close to a deal that would end their trade war.

Adding to the positive tone in the world markets Friday is positive economic news coming out of the European Union. The Euro zone jobless number fell by 23,000 in January, with the overall unemployment rate unchanged from December, at 7.8%. Meantime, inflation rose slightly in the Euro zone in February, to 1.5% from 1.4% in January, year-on-year. The European Central Bank would like to see a Euro zone inflation rate of around 2.0%. However, the Euro zone manufacturing purchasing managers’ index fell slightly in February, it was reported today.

Fed Chairman Jerome Powell gave a speech in New York Thursday night, in which he reiterated the Fed’s monetary policy will remain on hold due to the modest increase in risks to continued U.S. economic expansion. Markets did not react significantly to Powell’s remarks, as he just concluded two days of testimony on economic policy to Congress.

The key outside markets today see the U.S. dollar index slightly firmer. However, overall the greenback bulls have faded this week. Nymex crude oil prices are slightly up and trading around $57.50 a barrel.

U.S. economic reports due for release Friday include personal income and outlays, the U.S. manufacturing PMI, the global manufacturing PMI, the University of Michigan consumer sentiment survey, the ISM manufacturing report on business, and domestic auto industry sales.

Live 24 hours gold chart [Kitco Inc.]

Technically, the April gold bulls have the overall near-term technical advantage but are fading fast and need to show fresh power soon. A 3.5-month-old price uptrend line on the daily bar chart was negated today. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at this week’s high of $1,334.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at the overnight high of $1,316.50 and then at $1,320.00. First support is seen at the February low of $1,307.70 and then at $1,300.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls have the slight overall near-term technical advantage. However, a 3.5-month-old uptrend on the daily bar chart was negated as a bearish double-top reversal pattern has formed, to suggest a near-term market top is in place. 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 January low of $15.28. First resistance is seen at the overnight high of $15.665 and then at $15.75. Next support is seen at $15.50 and then at $15.28. Wyckoff's Market Rating: 5.5.

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