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Gold, silver prices up as safe-haven bids getting stronger

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(Kitco News) - Gold and silver prices are up in early U.S. trading Friday, with silver posting strong gains. Safe-haven demand is back in the precious metals this week as global stock markets and trader/investor sentiment have become more tentative this week. The silver bulls have come roaring to life this week as prices Friday hit a two-month high and for the week have gained around $1.00 from last Friday’s close. June gold futures were last up $4.90 an ounce at $1,746.00. July Comex silver prices were last up $0.609 at $16.77 an ounce.

There is important U.S. economic data out Friday morning that further reflects the serious damage being inflicted upon the world’s largest economy. The just-released April retail sales report came in down 16.4% versus expectations of down around 12%. The gold market popped to daily highs on the worse-than-expected sales number.

Other data out today include U.S. industrial production for April (seen down 11%), the University of Michigan consumer sentiment survey, the Empire State manufacturing survey, manufacturing and trade inventories, and Treasury international capital data.

Global stock markets were mostly firmer in overnight trading. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Many traders and investors are wondering how the U.S. stock market has rebounded so strongly, what with 36 million American workers losing their jobs in just two months’ time and a vast number of businesses and commerce still shuttered. Bigshot investment managers have gone on TV this week to say the U.S. stock market is presently the most over-valued they have ever seen it. However, these guys are likely just “talking their own book.” Still, the general public is taking a dim view of Wall Street recovering smartly, while main street continues to see major suffering. There are growing tensions as workers in the lower halves of nations’ income levels, who have seen the most job losses and who have the least amount of money saved, desperately need to get back to work but many governments won’t let them. This situation cannot go on for an extended period of time without civil unrest, which is already being seen in a few areas. This growing unease has likely helped gold get a better safe-haven bid recently.

In overnight news, the Euro zone first-quarter gross domestic product came in at -3.8% from the fourth quarter and down 3.2%, year-on-year.

Economic data released in China Friday was somewhat upbeat, showing that the world’s second-largest economy is recovering from the first-quarter quarantining of the public. However, a worrisome component of the data was that retail sales fell 7.5% in April, suggesting consumers, while back to work, are still leery about spending.

The important outside markets see Nymex crude oil futures higher early today and trading around $28.00 a barrel. The recent rally in the crude oil market has been a bullish element for the stock markets’ rallies. The U.S. dollar index is lower today. The yield on the benchmark U.S. Treasury 10-year note is currently around 0.62%.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage amid an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the April high of $1,788.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,666.20. First resistance is seen at the overnight high of $1,748.90 and then at $1,764.20. First support is seen at $1,735.50 and then at $1,725.00. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bulls have the firm overall near-term technical advantage with this week’s big gains. Silver bulls' next upside price objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.50. First resistance is seen at $16.75 and then at $17.00. Next support is seen at $16.50 and then at $16.25. Wyckoff's Market Rating: 6.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.