(Kitco News) - Gold prices are trading near unchanged and silver prices are higher in early U.S. trading Friday. Gold hit a nearly three-week high overnight. Buying interest in the precious metals is being somewhat limited by a higher U.S. dollar index that hit a more-than-two-year high Thursday and by recently rising U.S. Treasury yields. February gold was last up $0.90 at $2,669.90 and March silver was up $0.315 at $30.215.
Gold market bulls have been impressed recently by the yellow metal’s resilience and even good price strength despite a solid rally in the U.S. dollar index and rising U.S. Treasury yields. Broker SP Angel reports that stronger demand for gold coming out of Asia is at least partly offsetting the potentially bearish aspects of a stronger greenback and higher U.S. bond yields.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
In overnight news, the Chinese yuan pushed above 7.3 per U.S. dollar for the first time since late 2023. The move may signal that the People’s Bank of China is looking to accommodate mounting growth pressures through a weaker currency after holding it almost unchanged for more than two weeks. Bloomberg reports the break of 7.3 “in a way is inevitable with continued dollar strength and the relentless fall in domestic government bond yields,” said Wee Khoon Chong, senior APAC market strategist at BNY. China’s economic fundamentals point to further depreciation. “Risk sentiment is so poor that the benchmark stock index just closed at the weakest level since September and sovereign yields hit fresh record lows,” said Bloomberg.
The key outside markets today see the U.S. dollar index lower on a corrective pullback after hitting a more-than-two-year high Thursday. Nymex crude oil futures prices are near steady and trading around $73.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is on the rise and is presently at 4.551%. Said David Morrison of Trade Nation today in an email dispatch: “Treasuries remain depressed and hung over. The yield on the 10-year was around 4.55% this morning. And while elevated yields may indicate expectations of stronger U.S. economic growth, rather than simply an inflation bounce, they’re also a response to the U.S.’s budget deficit and the anticipation of the huge Treasury issuance required to pay for it.”
U.S. economic data due for release Friday includes the ISM report on business manufacturing and domestic auto industry sales.
Technically, February gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. First resistance is seen at the overnight high of $2,681.00 and then at $2,700.00. First support is seen at $2,650.00 and then at Thursday’s low of $2,636.10. Wyckoff's Market Rating: 6.0.
March silver futures bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at the August low of $27.39. First resistance is seen at last week’s high of $30.485 and then at $31.00. Next support is seen at the overnight low of $29.935 and then at the December low of $29.145. Wyckoff's Market Rating: 4.0.
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