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(Kitco News) – Gold and silver prices were not far from unchanged levels in early US trading on Friday. Such is the case with many markets heading into a midsummer weekend. At the end of this week, the mood of traders and investors is significantly more upbeat. This week’s tamer reports on US inflation have the market thinking the Federal Reserve may raise interest rates. August gold was down $0.60 at $1,963.20 and September silver was up $0.096 at $25.045.
Asian and European stock markets edged higher in overnight trade. US stock indexes pointed to narrowly mixed openings as the New York day session begins.
OANDA’s Craig Erlam said in a Friday morning email dispatch: “On the back of very encouraging inflation data from the U.S., it’s shaping up to be a fairly quiet end to the week. Inflation was already near the top, but something is up. The (US CPI) report was different, both in headline and in substance. Moreover, both monthly readings have been incredibly positive. Now it’s just a question of whether it can be sustained. Finally, the light-tightening tunnel is getting brighter, and investors are more confident that a (Fed) hike will emerge in two weeks, at which point attention will turn to the US economy, and can a soft landing be achieved before the talks? Lowering rates.”
Recent economic data coming out of China has the potential to “fly on oil” for a sustained global economic recovery. The world’s second largest economy is a heavy consumer of raw materials. A Wall Street Journal report today said: “Exports are collapsing in China and across Asia, and rising interest rates are weighing on global trade and economic growth.
Today’s major external markets saw the US dollar index steady and hit a 15-month low in overnight trade. Meanwhile, Nymex crude oil prices are close to $76.75 per barrel. The 10-year US Treasury note yield is currently 3.787%.
US economic data due for release on Friday includes import and export prices and a University of Michigan consumer sentiment survey.
Technically, gold futures bulls and bears are generally at a level in the recent technical playing field, but bulls have momentum. A nine-week-old bearish trend was rejected on the daily bar chart. The next upside price target for the bulls is for August futures to close above solid resistance at $2,000.00. The bears’ next near-term downside price target is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at this week’s high of $1,968.50 and then at $1,975.00. First support is seen at Thursday’s low of $1,956.60 and then at $1,950.00. Wyckoff’s Market Rating: 5.0
Silver bulls have a solid overall recent technical advantage. There is a three-week-old uptrend on the daily bar chart. The next upside price target for silver bulls is September futures prices above the high technical resistance at $26.645. The next bearish price target for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.25 and then at $25.50. The next support is seen at $24.835 followed by Thursday’s low at $24.31. Wyckoff’s Market Rating: 6.5.
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