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(Wallace Refiners) – Gold prices are modestly up in early U.S. trading Friday, on some short covering by the shorter-term futures traders head into the weekend, and with the geopolitical front becoming a bit more active this week. Still, buying interest in the safe-haven metals is being squelched today by rising U.S. government bond yields. April gold futures were last up $6.80 at $1,739.30 and May Comex silver was last down $0.111 at $26.235 an ounce.
Geopolitics is back closer to the front burner of the marketplace to end the week. This week has seen President Biden refer to Russian President Putin as a “killer” and then on Thursday at a U.S.-China ministerial meeting in Alaska both sides lashed out at each other over various matters. While not roiling the marketplace, this week’s moves by the Biden administration toward Russia and China have put the world on notice that U.S. foreign-policy sailing might not be as smooth with Biden as many had reckoned.
U.S. Treasury bond yields are in the spotlight late this week. The U.S. Treasury 10-year note yield hit 1.75% Thursday—a 14-month high–and is now fetching 1.69% Friday morning. More and more, traders, investors and market watchers are moving to the higher-inflation (and possibly problematic inflation) camp. The bull run in the U.S. stock market has not been derailed, yet, but stock market bulls are a bit wobbly now.
Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Friday is “quadruple witching” day for the marketplace, in which stock options, stock futures and futures options expire. Such could provide some extra volatility in the U.S. stock market today.
In overnight news, the Bank of Japan kept its monetary policy unchanged at its meeting Friday. The BOJ said it expects its interest rates to remain steady or to even fall a bit.
The key “outside markets” today see Nymex crude oil futures prices higher after getting pounded lower Thursday, trading around $61.00 a barrel this morning. One important element: commodity market traders need to keep an eye on crude oil prices. Thursday’s big price decline in crude fired a shot across the bow for raw commodity market bulls. If oil prices take out Thursday’s low, such would be one clue that many of the raw commodity sector markets that had been in rally modes, may have topped out, at least for the near term. Meantime, the U.S. dollar index is slightly up early today.
There is no major U.S. economic data due for release Friday.
Technically, the April gold futures bears have the overall near-term technical advantage. However, a nine-week-old price downtrend line on the daily chart has been negated. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,775.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,673.30. First resistance is seen at the overnight high of $1,744.60 and then at this week’s high of $1,754.20. First support is seen at the overnight low of $1,727.10 and then at this week’s low of $1,716.60. Wyckoff’s Market Rating: 3.5
May silver futures bears have the slight overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $27.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $24.845. First resistance is seen at this week’s high of $26.74 and then at $27.00. Next support is seen at $26.00 and then at this week’s low of $25.805. Wyckoff’s Market Rating: 4.5.
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