Solid price gains for gold, silver on ideas of easing monetary policies

(Kitco News) – Gold and silver prices are posting good gains and hit three-week highs in early U.S. trading Friday. The two precious metals late this week have shot sharply higher on notions of central banks easing their monetary policies sooner rather than later. The safe-haven metals traders are on this day apparently focusing more on the better consumer and commercial demand prospects for metals. June gold was last up $38.40 at $2,378.70. July silver was last up $0.45 at $28.82.

Risk sentiment is more upbeat to end the trading week, following recent data that indicates the U.S. economy is cooling just a bit, which would allow the Federal Reserve to cut interest rates sooner. Thursday morning’s U.S. jobless claims report came in higher than expected, and that follows last week’s monthly jobs report that showed less non-farm jobs gains than expected. Both of these reports were preceded by the FOMC meeting that was not deemed as hawkish as the marketplace had feared. The Bank of England on Thursday also somewhat surprised the marketplace by leaning a bit easier on its rhetoric, even though it did not change monetary policy. And geopolitics, while still near the front burner of the marketplace, is not at a nearly full boil that was the case a few months ago. All of the above are making for better risk appetite among traders and investors.

Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed to toward higher openings when the New York day session begins.

The key outside markets today see the U.S. dollar index slightly firmer. Nymex crude oil prices are higher trading around $80.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.45%.  

U.S. economic data due for release Friday includes the University of Michigan consumer sentiment survey, the monthly Treasury budget statement and the monthly USDA supply and demand report. A couple of Federal Reserve officials speak today in Minneapolis.

Technically, the gold futures bulls have the solid overall near-term technical advantage. A price downtrend on the daily bar chart has been negated and prices have just seen a bullish upside “breakout” from the recent trading range. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,400.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at today’s high of $2,385.30 and then at $2,400.00. First support is seen at $2,365.00 and then at today’s low of $2,352.00. Wyckoff’s Market Rating: 7.5.

The silver bulls have the firm overall near-term technical advantage and have gained good power this week. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $27.00. First resistance is seen at today’s high of $29.00 and then at $29.37. Next support is seen at the overnight low of $28.47 and then at $28.00. Wyckoff’s Market Rating: 7.0

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