Gold, silver see price strength amid downbeat U.S. retail sales

By Jim Wyckoff - Kitco News

Gold and silver prices are higher in early morning U.S. trading Friday, drawing support from a weaker-than-expected U.S. economic report, as well as higher crude oil prices and a lower U.S. dollar index. Bullish technical charts continue to invite traders to the long side of both metals. June gold futures were last up $15.10 at $1,839.10 and July Comex silver was last up $0.326 at $27.37 an ounce.

The just-released U.S. economic data point of the day saw the retail sales report for April come in at unchanged, compared to forecasts for a rise of 0.8%, and compares with the mammoth gain of 9.8% in the March report. This is one more report that throws cold water on notions of the Federal Reserve tightening U.S. monetary policy anytime soon.

Global stock markets were mostly higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. The equities bulls are still on the ropes following this week’s selling pressure that negated near-term price uptrends on the daily bar charts for the U.S. stock indexes, which is a technical clue the indexes have put in price tops. Inflation worries are still on the minds of many traders and investors and that makes them more tentative about holding paper assets. Ironically, Thursday’s global trading saw many raw commodity markets sell off, some sharply, including grains, crude oil, iron ore, copper, and others.

The marketplace is still keeping an eye on the intensifying military confrontation in the Middle East, as Israel and Hamas are exchanging heavy artillery and rocket barrages.

The key outside markets today see the U.S. dollar index lower. Meantime, Nymex crude oil prices are firmer and trading around $64.40 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.654%.

Other U.S. economic data due for release Friday includes import and export prices, industrial production and capacity utilization, manufacturing and trade inventories, and the University of Michigan consumer sentiment survey.

Technically, June gold futures bulls have the overall near-term technical advantage amid a six-week-old price uptrend in place on the daily bar chart.

Bulls’ next upside price objective is to produce a close above solid resistance at the May high of $1,846.30.

Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00.

First resistance is seen at this week’s high of $1,846.30 and then at $1,850.00. First support is seen at $1,825.00 and then at the overnight low of $1,819.00. Wyckoff's Market Rating: 6.5

The silver bulls have the overall near-term technical advantage amid a six-week-old price uptrend in place on the daily bar chart.

Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $29.00 an ounce.

The next downside price objective for the bears is closing prices below solid support at $26.00.

First resistance is seen at $27.50 and then at $27.83. Next support is seen at $27.00 and then at this week’s low of $26.78. Wyckoff's Market Rating: 6.5.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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