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Gold price rallies from 8-mo. low as bargain buyers step in

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(Kitco News) - Gold futures prices are moderately higher in early U.S. trading Friday and have rebounded after hitting an eight-month low overnight. Would-be bargain-basement buyers have stepped into the market to end the trading week, reckoning the gold market has been beaten down far enough and is due for a least a decent upside correction in the existing downtrend on the daily chart. Silver prices are solidly higher. April gold futures were last up $8.40 at $1,783.60 and March Comex silver was last up $0.492 at $27.56 an ounce.

The precious metals bulls are also benefitting from a lower U.S. dollar index on this day.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Global equity markets are ending a mixed week on a quiet note. Overnight, the MSCI Asia Pacific Index was broadly unchanged, while Japan's Topix index closed 0.7% lower. In Europe, the Stoxx 600 Index was up a bit.

Said broker SP Angel in an email dispatch this morning: “Copper and nickel prices continued to rally on Friday, powering to multi-year highs along with tin as the world looks to build its way out of a Covid-fueled recession. Investors are starting to appreciate that there is insufficient mine capacity to enable rapid transition to a more environmentally conscious global economy. As the U.S., China, EU, U.K. and beyond all look to roll out their own packages of environmental initiatives, the post-crisis demand for industrial metals is widely expected to outstrip near-term and medium-term supply.” As these industrial metals rise, it could be that safe-haven gold and silver markets could be pulled along for the ride.

The other key “outside market” today sees Nymex crude oil futures prices are down and trading around $59.50 a barrel. The U.S. wants to talk with Iran on its nuclear ambitions, and that could put more Iranian oil on the world market in the coming months. The U.S. 10-year Treasury note yield is fetching 1.308%. Government bond yields are on the rise, offering a more competitive asset class that may be pulling money away from the stock markets.

U.S. economic data due for release Friday includes the U.S. flash service and manufacturing PMIs, and existing home sales. U.S. economic data is suggesting the world’s largest economy is picking up steam, highlighted by this week’s retail sales report for January showing an unexpected surge.

Live 24 hours gold chart [Kitco Inc.]

Technically, the February gold futures bears have the firm overall near-term technical advantage amid a five-week-old price downtrend in place on the daily chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at Thursday’s high of $1,788.80 and then at Wednesday’s high of $1,794.20. First support is seen at the overnight low of $1,759.00 and then at $1,750.00. Wyckoff's Market Rating: 3.0

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $30.35 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at today’s high of $27.71 and then at $28.00. Next support is seen at $27.00 and then at last week’s low of $26.75. 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.