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Upside price correction for gold Friday

Kitco News

(Kitco News) - Gold and silver prices are higher in early U.S. trading Friday, with silver scoring a two-week high. Gold is posting just modest gains and is seeing a corrective rebound from this week's selling pressure. The gold market still feels heavy after this week's monetary-policy-hawkish FOMC meeting results. December gold was last up $6.40 at $1,946.00 and December silver was up $0.318 at $24.005.

Asian and European stocks were mixed overnight. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. The U.S. stock indexes have become wobblier late this week, following Wednesday's conclusion of the FOMC meeting that saw the Federal Reserve lean even more hawkish on U.S. monetary policy. A Wall Street Journal story today has a headline: “Higher rates not just for longer--maybe forever."

The United Auto Workers union strike in the U.S. is also starting to impact businesses nationwide and that's also dampening trader and investor risk appetite.

In overnight news, the Bank of Japan kept its monetary policy unchanged, keeping it ultra loose. The key deposit rate was kept at -0.1%. The BOJ kept its 10-year bond yield cap at 1.0%. The Japanese yen continues to weaken against the U.S. dollar, which is beginning to worry the marketplace a bit.

Gold investment potential remains healthy despite Fed's hawkish stance - State Street's Milling-Stanley

The key outside markets today see the U.S. dollar index higher and hitting a 6.5-month high. Nymex crude oil prices are higher and trading around $90.75 a barrel. The benchmark U.S. Treasury 10-year note yield is presently at a multi-year high and fetching 4.478%--the highest since 2007.

U.S. economic data due for release Friday includes the U.S. flash manufacturing and services PMIs.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold futures bears have the firm overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close in December futures above solid resistance at the September high of $1,980.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,913.60. First resistance is seen at Thursday's high of $1,952.20 and then at this week's high of $1,968.90. First support is seen at the overnight low of $1,939.60 and then at this week's low of $1,933.10. Wyckoff's Market Rating: 3.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage. However, there are stiff technical support layers just below the market that may well halt the decline. Silver bulls' next upside price objective is closing December 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 $24.25 and then at $24.50. Next support is seen at the overnight low of $23.665 and then at $23.325. Wyckoff's Market Rating: 4.0.

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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.