(Kitco News) - Gold and silver prices are mildly up in early U.S. trading Friday. Silver is close to its three-year high scored in April. Bullish technical on the charts continue to invite the speculators to the long sides of the two precious metals markets. June gold was last up $6.10 at $2,391.60. July silver was last up $0.089 at $29.965.
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins, after setting record highs on Thursday.
In overnight news, the Euro zone April consumer price index was reported up 2.4%, year-on-year, which was right in line with market expectations.
China’s government has announced measures to bolster is listing property sector, including a 300 billion yuan relending facility for affordable housing. China property stocks rallied sharply on the news. China also got some upbeat economic news today, as its April industrial output was up 6.7%, year-on-year, which was better than market expectations.
Comex copper futures prices this week hit a record high above $5.00 a pound. There continues to be talk in the metals industry of a big “short squeeze” in Comex copper futures. The respected broker SP Angel said this morning in an email dispatch: “China’s CMOC, which owns the IXM trading group, filed a report to the Shanghai Stock Exchange Thursday stating its positions were ‘completely controllable’ and its trades were ‘100% hedged to reduce price risks.’ Reuters reported on Wednesday that IXM and Trafigura were sourcing physical copper to deliver into CME to cover short positions. The positions reflect expectations that current copper prices have moved ahead of current demand requirements, with China buying muted. Supply disruptions have limited concentrate availability, seeing smelters rush to secure available feedstock to keep their operations running, with some operating at a loss. Traders expect redirected shipments into the U.S. to take some pressure of current prices, although this could take up to two weeks. Trading volumes in base metals have seen huge spikes this week, with LME contracts hitting all-time highs in liquidity terms. Speculators are wagering on base metals alongside hopes of lower interest rate environments and improved PMI data. Russian sanctions have also fueled concerns over metal shortages. Copper hedge fund positioning is reaching the highest levels since January 2018. Shanghai speculators are also taking part, with futures trading volumes setting record highs in April.”
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are slightly down and trading around $79.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.38%.
U.S. economic data due for release Friday is light and includes leading economic indicators.
Technically, the gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the contract high of $2,448.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at this week’s high of $2,402.70 and then at $2,415.00. First support is seen at the overnight low of $2,377.80 and then at Wednesday’s low of $2,357.10. Wyckoff's Market Rating: 7.5.
The silver bulls have the solid overall near-term technical advantage and have gained good power this week. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at the April high of $30.19. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $30.19 and then at $30.50. Next support is seen at Thursday’s low of $29.555 and then at $29.00. Wyckoff's Market Rating: 8.0.
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