(Kitco News) - Gold and silver prices are a bit weaker in early U.S. trading Thursday, on some more mild profit-taking following gains posted earlier this week. Still, safe-haven demand amid elevated geopolitical tensions and a sharp drop in the U.S. dollar index this week are keeping a floor under gold and silver prices. April gold was last down $13.00 at $2,913.00. May silver prices were last down $0.209 at $32.925.
Asian and European stock markets were mostly higher overnight. Hong Kong’s Hang Seng rose 3.3%, boosted from an unexpected policy shift as China announced plans to raise its deficit to around 4% of GDP. U.S. stock indexes are pointed to solidly lower openings when the New York day session begins.
Risk aversion is elevated again today, amid the specter of a tit-for-tat game with tariffs by major countries that could spin the global economy into a recession. Said David Morrison of Trade Nation in an email dispatch today: “President Trump has called everyone’s bluff and has said he’s prepared to take some pain to get what he wants. Tariffs may have been the trigger for the latest downturn, but they aren’t the only story. Speculation is growing over the possibility that a U.S. recession could start this year. GDP growth forecasts have been downgraded sharply, while inflation remains well above the Fed’s 2% target. Recent economic data releases have disappointed, most notably consumer confidence, retail sales and weekly jobless claims.”
In overnight news, the European Central Bank cut its main interest rate by 0.25%, as expected.
The U.S. data point of the week comes with Friday morning’s employment report for February from the Labor Department. The key non-farm payrolls number is expected to come in up 170,000, compared to a rise of 143,000 in the January report.
The key outside markets today see the U.S. dollar index weaker and hit another four-month low. Nymex crude oil futures prices are firmer and trading around $66.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.32%.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, the international trade in goods and services report, revised productivity and costs, monthly wholesale trade, and the monthly retail chain store sales index.
Technically, April gold futures 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 $2,974.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $2,844.10. First resistance is seen at the this week’s high of $2,941.30 and then at $2,950.00. First support is seen at $2,900.00 and then at Tuesday’s low of $2,892.50. Wyckoff's Market Rating: 8.0.
May silver futures bulls have the slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $34.56. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at the overnight high of $33.335 and then at $33.50. Next support is seen at Wednesday’s low of $32.395 and then at $32.00. Wyckoff's Market Rating: 5.5.
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