(Kitco News) - Gold prices are modestly lower and silver prices slightly down in early U.S. trading Friday. Overnight military action by Israel against Iran is ironically being viewed as potentially having some positive implications, and that’s bearish for the safe-haven metals. June gold was last down $5.10 at $2,392.90. May silver was last down $0.085 at $28.295.
After an initial overnight knee-jerk, the markets are not reacting strongly to an overnight Israeli retaliatory air strike on a major Iranian city, which apparently produced little damage. Military and geopolitical analysts are saying Israel’s military action overnight was limited and meant to show Iran that Israel has the capability to do a major, devastating strike on Iran if it wants to do so. Meantime, Iran appears to be, at least initially, downplaying the event as minor. Many analysts see the overnight event as possibly being the beginning of a de-escalation of Israel-Iran tensions. However, there are still major unknowns, such as how Iran will respond, or if Israel will strike Iran again. The U.S. military was not involved in the overnight Israeli air strikes.
After a brief overnight spike on the Israeli air strike on Iran, gold has backed off. Longtime gold market watchers have noticed that there has been much stronger demand for gold coming out of China recently, as evidenced by huge trading volumes in gold futures on the Chinese futures exchanges.
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed to toward weaker openings when the New York day session begins.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are lower and trading around $82.25 a barrel—well down from the overnight spike high of $86.28. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.569%.
There is no major U.S. economic data due for release Friday.
Technically, the gold futures bulls have the strong overall near-term technical advantage. A two-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at $2,415.00 and then at today’s high of $2,433.30. First support is seen at Thursday’s low of $2,377.20 and then at Wednesday’s low of $2,370.70. Wyckoff's Market Rating: 8.5.
The silver bulls have the strong overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at this week’s high of $29.10 and then at $29.50. Next support is seen at $28.00 and then at this week’s low of $27.665. Wyckoff's Market Rating: 8.5.
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