Gold Price Gains, Silver Short Coverage, Friendly Outside Markets

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(Kitco News) – Gold and silver prices are higher at the start of Friday’s U.S. trading session, short-hedged in futures markets following recent selling pressure, and amid support from a lower US dollar index and lower US Treasury yields that day. April gold was last up $11.60 at $1,851.90 and May silver was up $0.274 at $21.17.

Global equity markets were mostly firmer overnight. US stock indices are trending towards firmer openings when the day’s session in New York begins. US stock indices are in an incipient downtrend on the daily bar charts.

The general market has recently had to grapple with the realization that problematic global inflation is likely to last longer than traders and investors had originally anticipated or hoped. This notion has recently undermined the risk appetite of traders and investors. A headline from today’s Wall Street Journal reads: “Global economy in good shape; this is bad news for central bankers.

In the news overnight, the governor of China’s central bank signaled that the bank would ease monetary policy by cutting banks’ reserve requirement ratio, to support China’s economy.

Meanwhile, the Eurozone received mixed news on inflation, with its producer price index falling 2.8% in January, but up 15.0% year-on-year. These figures were less hot than expected.

Major overseas markets are seeing the US dollar index weaken this morning. Nymex crude oil futures prices are down slightly and are trading around $78.00 per barrel. The yield on the benchmark 10-year US Treasury note is currently at 4.007%.

US economic data due out on Friday includes the US Services Purchasing Managers Index (PMI), the ISM Business Services Report and the Global Services PMI.

Technically, the gold futures bulls and bears are back on an overall short-term technical playing field. A downtrend on the daily bar chart has been reversed. The next upside price target for the Bulls is to produce an April futures close above the strong resistance at $1,900.00. Bears next short-term downside price objective is to push futures prices below strong technical support at $1,800.00. First resistance is seen at last week’s high at $1,856.40 and then at $1,870.00. First support is seen at the overnight low of $1,842.00 and then at $1,825.00. Wyckoff Market Rating: 5.0.

The silver bears have the overall short-term technical advantage. Prices are in a strong downtrend on the daily bar chart. The next upside price objective for silver bulls is to close May futures prices above strong technical resistance at $22.25. The next downside price objective for the bears is to close prices below the strong support at $19.00. First resistance is seen at this week’s high at $21.285 and then at $21.52. Next support is seen at Thursday’s low at $20.76 and then at this week’s low at $20.505. Wyckoff Market Rating: 4.0.