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Gold Prices Power To 13-Mo. As World Marketplace Frets

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(Kitco News) - Gold prices are solidly up and scored a 13-month high in early morning U.S. trading Friday. Silver prices are on the march north, too. Safe-haven buying interest is featured late this week as the U.S. and Iran may be ready to square off. August gold futures were last up $12.90 an ounce at $1,356.30. July Comex silver prices were last up $0.198 at $15.09 an ounce.

The marketplace is on edge following the U.S. blaming Iran for two more ships in the Persian Gulf area (this time in the Gulf of Oman) being attacked by either smaller gunboats, mines or possibly even a torpedo. The U.S. military has a video showing what is apparently a small Iranian gunboat next to one of the big ships that was attacked. U.S. Secretary of State Mike Pompeo said Iran’s attacks are a “clear and present threat to international peace and security.” U.S. Navy ships are reportedly protecting some oil tankers in the region. This situation could escalate rapidly if Iran and the U.S. have a direct military confrontation.

Markets were also spooked by news Friday that China’s industrial production was at its slowest growth pace in 17 years in May, at up 5%, year-on-year, and below market expectations of 5.5% growth. The world’s number-two economy has been showing signs of weakening for months, amid a major trade war with the U.S.

European and Asian stock indexes were mostly lower overnight, on the keener risk aversion among traders and investors. The U.S. stock indexes are also pointed toward modestly lower openings when the New York day session begins. U.S. Treasuries are seeing their yields drop significantly on safe-haven demand.

The just-released U.S. retail sales report for May came in about in line with market expectations and had little impact on market prices.

In other overnight news, the Russian central bank cut its main interest rate to 7.5%, in the latest move by the world’s central banks to ease their monetary policies amid slowing global economic growth and very low inflationary pressures.

The key “outside markets” today see Nymex crude oil prices weaker and trading around $52.00 a barrel. Worldwide supply and demand fundamentals for crude oil favor the bears. Meantime, the U.S. dollar index is up in early U.S. trading, on some safe-haven demand. 

Other U.S. economic data due for release Friday includes industrial production and capacity utilization, manufacturing and trade inventories and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage and gained more power today. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,375.00. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,330.00. First resistance is seen at today’s high of $1,362.20 and then at $1,370.00. First support is seen at $1,350.00 and then at today’s low of $1,345.70. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears still have the overall near-term technical advantage, but prices appear headed for a bullish weekly high close and bulls have momentum. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the June high of $15.15 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $14.265. First resistance is seen at $15.15 and then at $15.25. Next support is seen at today’s low of $14.885 and then at this week’s low of $14.625. Wyckoff's Market Rating: 4.0.

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