Corrective price rebounds for gold, silver
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(Kitco News) - Gold and silver prices are modestly higher in early U.S. trading Friday, on mild upside corrections after hitting multi-week lows on Thursday. A weaker U.S. dollar index and firmer crude oil prices so far today are also friendly outside markets for the metals. Still, the gold and silver markets are in near-term technical trouble. June gold was last up $5.40 at $1,965.20 and July silver was up $0.102 at $23.735.
Asian and European stock markets were mostly higher overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Stock market bulls are having a good week. The Nasdaq index is at an 8.5-month high and the S&P 500 stock index hit a 3.5-month high overnight. Trader and investor sentiment has been lifted as it appears the U.S. Congress and the Bident administration will come to an agreement to raise the U.S. government's debt ceiling and avoid a default on its obligations. Matters such as the inverted U.S. Treasury yield curve, which has been a historical signal of impending economic recession, and the banking turmoil have moved to the back burner of the marketplace—at least for now.
In overnight news, Japan's Nikkei stock index hit a 33-year high and has risen 18% so far this year. Part of the reason for the rally in Japanese shares is that Warren Buffet last month said he has more Japanese stocks in Berkshire Hathaway's portfolio than any other country, save for the U.S. "Japan looks cheap," said a Wall Street Journal article.
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The key outside markets today see the U.S. dollar index lower on a corrective pullback after hitting a seven-week high Thursday. The apparent U.S. debt extension agreement and a still-hawkish Federal Reserve are boosting the greenback. Nymex crude oil prices are higher and trading around $72.75 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.646%. Bond yields have risen this week.
There is no major U.S. economic data due for release Friday.
Technically, the gold futures bulls have the overall near-term technical advantage but are fading fast. A price uptrend on the daily bar chart has been negated. Prices are starting to trend down on the daily bar chart. Bulls' next upside price objective is to produce a close in June futures above solid resistance at the May high of $2,085.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,975.00 and then at $1,980.00. First support is seen at this week's low of $1,954.40 and then at $1,950.00. Wyckoff's Market Rating: 6.0
The silver bears have the overall near-term technical advantage. Prices are trending lower on the daily chart. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at this week's high of $24.395. Next support is seen at this week's low of $23.485 and then at $23.00. Wyckoff's Market Rating: 4.0.