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Gold, Silver Prices Rebound; Tame U.S. Inflation Data Supportive

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(Kitco News) - Gold and silver prices are posting moderate corrective gains in early-morning dealings Friday, following the sharp losses suffered Thursday. Overnight, gold did drop to a three-week low, while silver hit a three-month low. Some mild U.S. inflation data just released is also helping out the precious metals market bulls. April gold futures were last up $6.10 an ounce at $1,295.90. May Comex silver was last up $0.122 at $15.09 an ounce.

The just-released U.S. personal income and spending report for February came in at up 0.2%, which was in line with market expectations. The January personal consumption expenditures price index came in at down 0.1% from December and up 1.8%, year-on-year. Personal spending in January came in below expectations, at up 0.1% from December. These numbers fall into the camp of the U.S. monetary policy doves, who do not want to see U.S. interest rates rise anytime soon. Metals prices did up-tick after hit report hit the news wires.

Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Today is the last trading day of the week, of the month, and of the quarter, which makes it an extra important trading day from a charts and technical perspective. Traders and investors are exhibiting a bit more risk appetite late this week, which has buoyed world stock markets but has helped to sink the safe-haven gold and silver markets.

The U.S. and China held high-level trade talks in Beijing late Thursday and Friday. U.S. Treasury Secretary Steven Mnuchin said those talks were productive. However, Larry Kudlow, President Trump's economic advisor, said on Thursday any final U.S.-China trade accord is likely to come months down the road. There is no clear consensus in the marketplace on the eventual outcome of the U.S.-China trade talks, which means that when any final result is announced it is likely to cause at least some volatility in some markets.

The U.K. Parliament is likely to vote Friday on another option offered by Prime Minister Theresa May to break the Brexit deadlock. There are not high expectations for her latest plan to be approved by the MPs. Today is the day the U.K. was set to leave the European Union. May's options moving forward on the matter are increasingly limited, with speculation of a general election being held in the near future.

The key outside markets today see the U.S. dollar index higher and hitting another 2.5-week high today. The USDX is back near its recent multi-month high. Meantime, Nymex crude oil prices are higher and trading around $60.00 a barrel. Oil prices are still trending higher on the daily bar chart even though price action has been sideways this week.

U.S. economic reports due for release Friday include personal income and outlays, the Chicago ISM business survey, new residential sales and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls still have the overall near-term technical advantage but have faded badly this week and they need to show fresh power soon to avoid more serious chart damage. Bulls' next upside price objective is to produce a close in April futures above solid resistance at this week's high of $1,324.50. 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 $1,300.00 and then at Thursday's high of $1,311.10. First support is seen at the overnight low of $1,286.10 and then at $1,280.00. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls have lost their overall near-term technical advantage and a downtrend line has been restarted on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the March high of $15.65 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at $15.25 and then at Thursday's high of $15.315. Next support is seen at the overnight low of $14.95 and then at $14.75. Wyckoff's Market Rating: 5.0.

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