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Slight price gains in gold, silver on mild safe-haven bids

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(Kitco News) - Gold and silver prices are modestly higher in early U.S. trading Friday, as the precious metals are catching a slight safe-haven bid heading into the weekend. The general marketplace sees elevated risk aversion amid wobbly stock, bond and financial markets at present. December gold was last up $2.60 at $1,671.00 and December silver was up $0.183 at $18.885.

Global stock markets were mixed overnight, with European stocks mostly up and Asian shares mostly down. U.S. stock indexes are pointed to higher openings when the New York day session begins. The S&P 500 stock index on Thursday closed at a its lowest level in nearly two years. Regarding Friday morning's firmer stock prices in the U.S. and Europe: "This looks like nothing more than a dead-cat bounce after steep declines over the last couple of weeks as investors have been forced to once again accept that interest rates are going to rise further and faster than hoped," said Craig Erlam of OANDA. The European and U.S. stock markets backed off their overnight highs when news reports surfaced that the British prime minister reiterated she will not back down on her plans to cut taxes and raise spending in order to reinvigorate the U.K. economy.

In overnight news, consumer price inflation in the Euro zone rose to a higher-than-expected 10% in September, year-on-year, from 9.1% in August. European markets are pricing in a more than 70% chance of a 75-basis-point rate hike from the European Central Bank in October.

In other news, the UK second-quarter GDP was revised up from -0.1% to +0.2%.

China's purchasing managers indexes (PMI) for September came in weaker than expected, further suggesting the world's second-largest economy is in trouble.

The Reserve Bank of India raised its repo rate by 50 basis points to 5.9% on Friday in its fight against inflation. The decision was widely expected.

Currency markets volatility is a sign the Fed has already broken the global economy - MKS' Shiels

Industrial metals prices are rising as the London Metals Exchange (LME) considers banning Russian-mined metals to LME exchange's warehouses. Aluminum, nickel and copper all have risen on the news.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices slightly lower and trading around $81.00 a barrel. Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.688%.  

Today is the last day of the month and of the quarter, making it an extra important trading day from a technical perspective.

U.S. economic data due for release Friday includes personal income and outlays, including the PCE price indexes that the Federal Reserve monitors closely for inflationary pressures. Also due out today is the ISM Chicago business survey and the University of Michigan consumer sentiment survey.

Live 24 hours gold chart [Kitco Inc.]

Technically, the December gold futures bears have the solid overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at the overnight high of $1,682.90 and then at $1,700.00. First support is seen at Thursday's low of $1,649.30 and then at this week's low of $1,622.20. Wyckoff's Market Rating: 2.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at the September low of $17.40. First resistance is seen at the overnight high of $19.185 and then at $19.50. Next support is seen at $18.465 and then at $18.00. Wyckoff's Market Rating: 2.5.

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.