(Kitco News) - Gold prices are solidly up in early U.S. trading Friday, as the chart-based speculators are featured buying as the yellow metal prices are not far below record highs. Two key “outside markets” are also friendly for the precious metals today as the U.S. dollar index is weaker and bond yields have down-ticked. December gold was last up $21.90 at $2,514.30. September silver was down $0.128 at $28.29.
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The marketplace took Thursday’s much-stronger-than-expected U.S. retail sales report for July as suggesting the U.S. economy will not slip into recession. That rallied the U.S. stock indexes, which have now clawed back most or all of their August losses. The markets are now expecting only a 0.25% cut in U.S. interest rates at the September FOMC meeting. Reads a Barron’s headline today: “Markets have quickly forgotten jobs drama amid retail excitement.”
The gold market even rallied Thursday, post retail sales, apparently on ideas no recession in the world’s largest economy would translate into better global demand for gold. Broker SP Angel today said in an email dispatch: “We understand Chinese investors are still buying gold for investment and are forsaking diamonds due to disappointing resale values. The Indian harvest and wedding seasons historically saw new buying interest (in gold). They have done well over the years buying gold so why stop now?”
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly lower and are trading around $76.00 a barrel. The benchmark 10-year U.S. Treasury note is presently fetching 3.90%.
U.S. economic data due out Friday includes new residential construction and the University of Michigan consumer sentiment survey.
Technically, December gold bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,400.00. First resistance is seen at this week’s high of $2,519.70 and then at $2,524.00. First support is seen at the overnight low of $2,488.20 and then at Wednesday’s low of $2,476.20. Wyckoff's Market Rating: 7.5.
September silver futures bears have the overall near-term technical advantage. However, a nearly three-month-old downtrend on the daily bar chart has stalled out. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $29.355. The next downside price objective for the bears is closing prices below solid support at the August low of $26.505. First resistance is seen at this week’s high of $28.58 and then at $28.815. Next support is seen at $28.00 and then at this week’s low of $27.23. Wyckoff's Market Rating: 4.0.
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