Price pressure on gold, silver as greenback rallies

(Kitco News) – Gold and silver prices are lower in early U.S. trading Friday, on profit taking by the shorter-term futures traders after this week’s gains that pushed gold to a record high and silver to a 3.5-month peak. A strong rally in the U.S. dollar index late this week is a significantly bearish outside-market element for the precious metals. April gold was last down $17.40 at $2,167.30. May silver was last up $0.272 at $24.725.

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward higher openings and at or near this week’s record highs when the New York day session begins. The U.S. stock indexes are set to end their best week of gains this year. That’s a negative for the safe-haven metals, as the metals are a competing asset class with equities.

The marketplace is paying little attention as the U.S. Congress today is working to avert another federal government shutdown.

The key outside markets today see the U.S. dollar index higher. The USDX has seen solid gains since Wednesday’s FOMC meeting conclusion and was helped by some stronger U.S. economic data released Thursday. Nymex crude oil prices are slightly up and trading around $81.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.24%.

There are no major U.S. economic reports due out Friday.

Technically, the gold futures bulls still have the solid overall near-term technical advantage, but appear to have run out of gas for the near term. A four-week-old uptrend is still in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the record high of $2,225.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $2,149.20. First resistance is seen at the overnight high of $2,188.00 and then at $2,200.00. First support is seen at the overnight low of the overnight low of $2,163.80 and then at $2,149.20.

The silver bulls have the solid overall near-term technical advantage but have also run out of gas. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at the December high of $26.575. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at $25.00 and then at $25.50. Next support is seen at the overnight low of $24.58 and then at $24.22.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com