Comex April gold futures prices are trading modestly lower in early U.S. dealings Friday. The market is seeing some profit taking and a downside technical correction following recent solid gains that pushed the yellow metal to a three-month high this week. Losses in gold are being limited by the key “outside markets” being in a bullish daily posture for the precious metals Friday, as the U.S. dollar index is lower and crude oil prices are firmer. April gold last traded down $8.10 at $1,778.20 an ounce. Spot gold was last quoted down $4.50 an ounce at $1,776.25. March Comex silver last traded down $0.286 at $35.27 an ounce.
The precious metals markets have had a very good week and profit-taking pullbacks heading into the weekend are not surprising, nor are they unhealthy from a technical perspective, given the recent solid price gains.
Gold and silver have seen stronger demand this week from the present stare-down between allies Israel and the U.S, and Iran. Increasing focus in the media on the potential for Israel or U.S. military action against Iran has prompted increase investor anxiety in the market place. That’s bullish for safe-haven gold, and to a lesser degree bullish for silver. The rising tensions between Israel and the West, and Iran, are and likely will remain a major bullish fundamental factor for the gold market.
The Mid-East tensions have pushed the European Union sovereign debt crisis to the back burner this week, but for how long, many wonder. The Euro currency pushed to a fresh multi-week high overnight amid ideas the EU debt crisis has stabilized.
The U.S. dollar index is lower again Friday morning as the greenback bears have gained fresh downside technical momentum this week. The dollar index is poised to produce a technically bearish weekly low close on Friday. Meantime, Nymex crude oil futures prices are trading slightly higher after hitting a 9.5-month high on Thursday. The recent rally in crude oil prices is a major bullish factor for the precious metals. Crude oil and the U.S. dollar index will remain the two key “outside markets” that will generally have at least some daily influence on gold and silver price moves.
U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey and new residential home sales.
The London A.M. gold fixing was $1,778.50 versus the previous London P.M. fixing of $1,777.00.
Technically, April gold futures bulls have gained solid upside near-term technical momentum this week by pushing prices to a three-month high. Gold bulls still have the solid overall near-term technical advantage. Bulls' next upside technical breakout objective is to produce a close above solid technical resistance at the November high of $1,808.00. Bears' next near-term downside price objective is closing prices below solid technical support at the February low of $1,706.70. First resistance is seen at the overnight high of $1,784.40 and then at this week’s high of $1,789.50. First support is seen at $1,765.90 and then at Wednesday’s low of $1,750.70.
March silver futures hit a fresh five-month high overnight before backing off a bit. Silver bulls still have the overall near-term technical advantage and have gained fresh upside momentum this week. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $37.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of $32.64. First resistance is seen at the overnight high of $35.72 and then at $36.00. Next support is seen at $35.00 and then at $34.52.
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