Gold, silver see mild downside price corrections early Friday

(Kitco News,  Fri. Feb. 18th, 2022) – Gold and silver prices are a bit weaker in early U.S. trading Friday. Prices are seeing slight downside corrections from recent gains that saw gold hit another eight-month high overnight. Don’t be surprised to see bulls today step in to buy the dips, heading into an uncertain weekend on the geopolitical front. April gold futures were last down $7.80 at $1,894.20 and March Comex silver was last down $0.025 at $23.85 an ounce.

Global stock markets were mixed overnight. The U.S. stock indexes are pointed toward firmer openings when the New York day session begins, on corrective bounces after strong losses posted Thursday. Bears continue to have the near-term technical advantage in the U.S. stock indexes, which means the path of least resistance for prices is sideways to lower.

Trader and investor risk aversion is still on the high side heading into the weekend. The U.S. insists Russia is poised to invade Ukraine and has the intelligence to back up that claim. Russia still insists it has no plans to invade its neighbor, despite massing 150,000 troops on Ukraine’s border. Russia on Friday poured gas on the fire by announcing it is going to conduct nuclear drills. The major unknown to this geopolitical crisis is now the U.S. and NATO will respond to any Russian incursion into Ukraine. Much will likely depend on the degree to which any invasion occurs. Will any invasion be full-blown or will it be measured? Some are predicting the invasion is coming this weekend.

Gold price hits $1,900 on mounting Russia-Ukraine tensions and recession fears

The other element on the front burner of the marketplace is inflation concerns. This week saw more hot inflation readings come from the U.S. and China. The yield on the U.S. 10-year Treasury note is presently fetching 1.975%, which is down from levels over 2.0% seen earlier this week—likely due to “flight-to-quality” buying of U.S. Treasuries amid the geopolitical crisis.

The key outside markets today see crude oil prices solidly lower and trading around $89.50 a barrel. The U.S. dollar index is a bit firmer today.

U.S. economic data due for release Friday includes existing home sales and leading economic indicators.

Technically, the April gold futures bulls have the solid overall near-term technical advantage. Prices are trending up on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the May 2021 high of $1,922.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,900.00 and then at the overnight high of $1,905.00. First support is seen at the overnight low of $1,888.00 and then at $1,882.50. Wyckoff’s Market Rating: 8.0

March silver futures bulls have the overall near-term technical advantage and are working on a price uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the January high of $24.755 an ounce. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at this week’s high of $24.015 and then at $24.25. Next support is seen at the overnight low of $23.70 and then at $23.44

Posted by :

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com