Price gains for gold, silver, as technical tide has turned
(Kitco News) - Gold and silver prices are higher and hit multi-week highs in early U.S. trading Friday. The chart-based bulls have come out of their slumber and are now pressing their case on the buy side of the precious metals markets. The near-term technical postures in both gold and silver have markedly improved this week. A depreciating U.S. dollar on the foreign exchange market and this week's surge in crude oil prices have also given the metals market bulls confidence. June gold futures were last up $13.60 at $1,780.60 and May Comex silver was last up $0.346 at $26.31 an ounce.
Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward mixed openings and at or near record highs when the New York day session begins. Strong U.S. and China economic data this week have charged up the stock market bulls, who reckon the world's two largest economies, and maybe even Europe and Japan, will see strong economic growth in the coming months, or longer.
China's economy grew by 18.3% in the first quarter, year-over-year, with retail sales up 34% in March. However, the record 1Q GDP growth is slowing rapidly as manufacturing and consumer spending return to more normal levels. Keep in mind one year ago at this time China's economy was dealing with the pandemic, including lockdowns. First-quarter GDP growth compared with 2020's fourth quarter, when a recovery was under way, slowed to 0.6% growth--among the weakest of the past decade. For all of 2020, China's GDP was up 2.3%--the only major economy to show growth in 2020. Still, the latest figures "mask a sharp slowdown" in the world's second-largest economy as stimulus spending and easy credit are wound down, said Julian Evans-Pritchard of Capital Economics in a report. Still, the generally upbeat China economic news is friendly for the metals markets, as it suggests better consumer and commercial demand for the metals.
In other news, the Biden administration is already levying sanctions on Russia in retaliation for the SolarWinds hack and efforts to disrupt the U.S. elections. The U.S. has expelled Russian diplomats.
Meantime, the Euro zone March consumer price index was reported up 0.9% from February and up 1.3%, year-on-year. Those numbers are still tame, in an environment where many think inflation is rising at a trajectory that will become problematic in the coming months.
The key outside markets today see the U.S. dollar index slightly down. The greenback bulls have suffered this week. Nymex crude oil prices are near steady and trading around $63.45 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.576%.
U.S. economic data due for release Friday includes new residential construction and the University of Michigan consumer sentiment survey.
Technically, June gold futures prices hit a six-week high today and have seen a bullish upside "breakout" from the recent trading range. The gold bulls have gained the slight overall near-term technical advantage for the first time in months. The bulls also have momentum on their side. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's low of $1,723.20. First resistance is seen at $1,785.00 and then at $1,800.00. First support is seen at $1,759.40 and then at $1,750.00. Wyckoff's Market Rating: 5.5
May silver futures prices hit a three-week high today. The silver bulls and bears are now on a level overall near-term technical playing field. A 10-week-old downtrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at this week's low of $24.68. First resistance is seen at $26.50 and then at $26.74. Next support is seen at $26.00 and then at today's low of $25.795. Wyckoff's Market Rating: 5.0.