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Gold sees routine price pause following strong gains

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(Kitco News) - Gold prices are near steady and silver firmer in early U.S. trading Thursday, after both metals scored five-week highs Wednesday. Gold is seeing a pause and normal chart consolidation following its recent strong gains. April gold was last up $0.20 at $1,931.70 and May silver was up $0.228 at $22.10.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The marketplace has been somewhat assuaged by news the Swiss central bank has thrown its financial support behind the troubled Credit Suisse bank. Credit Suisse's CEO said his bank will continue its "strategic transformation to deliver value to our clients." Credit Suisse's stock price jumped 20% Thursday. However, many long-time market watchers are "waiting for the next shoe to drop" in the banking crisis.

The European Central Bank is meeting Thursday. The ECB was expected to raise its main interest rate by 50 basis points. However, the still-shaky banking sector in the Euro zone at present has likely altered the ECB's plans. Said analyst Han Tan from Exinity: "A week is indeed a long time in global financial markets, and the calculus for central bank rate hikes has been dramatically altered by the SVB and Credit Suisse crises in recent days. The market's prior foregone conclusion of a 50-basis point hike by the European Central Bank has been whittled down to a coin toss today. A 50bp hike may be too much for now, in light of the still-fragile sentiment surrounding the banking sector on both sides of the Atlantic. The ECB's dilemma pits consumer price stability against financial systemic stability, and markets will be attuned to where the ECB's bias lies. The central bank's policy signals could serve as a canary in the coal mine, at least ahead of the Fed's meeting next week, as contagion fears continue to permeate global financial markets."

The Fed is done - Axel Merk

The Federal Reserve's FOMC meets next week and there is a hot debate in the marketplace regarding whether the Fed will raise its main interest rate by 25 basis points, or stand pat amid the U.S. and European banking crises. There appear to be valid arguments for both sides.

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil futures prices are slightly firmer and trading around $67.75 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.494%.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction, and import and export prices.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bulls have the solid overall near-term technical advantage. Bulls' next upside price objective is to produce a close in April futures above solid resistance at the February high of $1,975.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at this week's high of $1,942.50 and then at $1,950.00. First support is seen at $1,900.00 and then at Wednesday's low of $1,889.50. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at $22.25 and then at this week's high of $22.525. Next support is seen at the overnight low of $21.765 and then at $21.465. Wyckoff's Market Rating: 6.0.

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.