Price pressure on gold amid keener risk aversion

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(Kitco News) - Gold and silver prices are lower, with gold solidly down, in early U.S. trading Friday, at the end of a week of choppy price action in both metals. Today, precious metals traders appear to be focusing on the bearish aspects of the potential for a slowdown in global economic growth that would crimp consumer and commercial demand for metals. June gold was last down $21.20 at $1,997.80 and May silver was down $0.148 at $25.225.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins. The U.S. stock indexes are listing this week amid some heightened risk aversion. Reads one Wall Street Journal headline today: "Disappointing earnings, recession fear press stocks." Another WSJ headline reads: "Slide in transport stocks seen as recession indicator."

However, another business news headline early this week read: "The most highly anticipated economic recession never seen."  The headline was fitting as recent U.S. economic data has come in generally upbeat, including U.S. non-farm jobs growth above to well above 200,000 the past year. Consumer and producer price inflation have tamed the past months and are trending lower. U.S. stock index prices that are not far below 1.5-year highs and the recent rallies in corn, soybeans, HRW wheat and cattle futures certainly don't suggest a U.S./global economic slowdown. Barring an unexpected banking turmoil flare-up or major geopolitical shock occurring in the coming months, the U.S. economy will likely have successfully attained a "soft landing" and will be set for more sustained growth in 2024.

In overnight news, the Euro zone's flash composite purchasing managers' index (PMI) came in at 54.4 in March, which was slightly above market expectations. A reading above 50.0 suggests growth. However, the manufacturing PMI came in at only 45.5, which was well below market expectations. The services PMI was 56.6.

The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly higher and trading around $77.50 a barrel. Oil prices have backed off recently on demand concerns amid global economic recession worries. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.524%.

U.S. economic data due for release Friday includes the U.S. flash manufacturing and services purchasing managers' indexes.

Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close in June futures above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at the overnight high of $2,016.80 and then at this week's high of $2,028.00. First support is seen at the overnight low of $1,992.60 and then at this week's low of $1,980.90. Wyckoff's Market Rating: 7.5

The silver bulls have the solid overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $27.00. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at this week's high of $25.71 and then at $26.00. Next support is seen at $25.00 and then at this week's low of $24.715. Wyckoff's Market Rating: 7.5.