Gold, silver bulls working on price uptrends

By Jim Wyckoff - Kitco News

Gold and silver prices are trading near steady in early U.S. trading Friday. Gold prices hit a seven-week high overnight. Both markets are now in near-term price uptrends and that is inviting fresh buying interest from the shorter-term technical traders. A slumping U.S. dollar on the foreign exchange market and the recent surge in crude oil prices are also working in favour of the metals market bulls. June gold futures were last down $0.60 at $1,779.50 and May Comex silver was last down $0.09 at $26.005 an ounce.

Gold prices are also supported due in part to reports late last week the Chinese government will allow domestic and foreign banks to import larger amounts of the precious metal into China. Such could also lead to more consumer demand for gold from China, already a major gold importer for consumers.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins, on a pause after hitting record highs last week. It's a quieter start to the trading week. There is no major U.S. economic data due for release Monday and the pace for U.S. data is slow up until Thursday.

Bitcoin prices are higher Monday after a huge drop over the weekend after Turkey's central bank said it would ban the crypto currency's use as a form of payment. Bitcoin investors are worried other central banks could do the same. However, it seems that Bitcoin has come too far into the investment fold for many, including high rollers on Wall Street, which suggests any crackdown by a major world central bank would be unlikely.

The key outside markets today see the U.S. dollar index down and hitting a six-week low. The greenback bulls are presently reeling. Nymex crude oil prices are weaker and trading around $63.00 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.562%, continuing to slip from highs seen earlier in April.

Technically, June gold futures prices hit a seven-week high today and have seen a bullish upside "breakout" from the recent trading range. The gold bulls have the overall near-term technical advantage for the first time in months.

The bulls also have momentum on their side. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week's low of $1,723.20.

First resistance is seen at today's high of $1,790.40 and then at $1,800.00. First support is seen at the overnight low of $1,773.30 and then at Friday's low of $1,760.30. Wyckoff's Market Rating: 6.0

The silver bulls have a slight overall near-term technical advantage. A three-week-old price uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce.

The next downside price objective for the bears is closing prices below solid support at last week's low of $24.68. First resistance is seen at last week's high of $26.38 and then at $26.74. Next support is seen at the overnight low of $25.775 and then at $25.38. Wyckoff's Market Rating: 5.5.

The original article was written by Jim Wyckoff and published on Kitco News