Corrective price bounces for gold and silver

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(Kitco News) – Gold and silver prices rose slightly in early US trading on Friday, amid moderate upward corrections, after hitting multi-week lows on Thursday. The weakness of the US dollar index and the firmest crude oil prices yet are metal-friendly overseas markets. However, the gold and silver markets continue to suffer from technical problems in the near term. Gold for the month of June was last up $5.40 at $1,965.20, and silver in July was up $0.102 to $23.735.

Asian and European stock markets mostly rose overnight. US stock indices are pointing to firmer openings when the daily New York session begins. The stock market bulls are having a good week. The Nasdaq hit an 8.5-month high, and the S&P 500 stock index hit a 3.5-month high overnight. Trader and investor sentiment has been lifted as it looks like the US Congress and the Bident administration will reach an agreement to raise the US government’s debt ceiling and avoid default. Issues such as an inverted US Treasury yield curve, which was a historical signal of an impending recession, and banking turmoil have moved to the back of the market – at least for now.

On the evening news, Japan’s Nikkei hit a 33-year high and is up 18% so far this year. Part of the reason for the rally in Japanese stocks is that Warren Buffett said last month that he has more Japanese stocks in Berkshire Hathaway’s portfolio than any other country, except the US “Japan looks cheap,” an article in the Wall Street Journal reported.

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Today, major foreign markets are seeing a decline in the US Dollar Index on the back of a corrective pullback, after hitting a seven-week high on Thursday. An apparent US debt extension agreement and a still bullish Federal Reserve are supporting the greenback. Crude oil prices are higher on NYMEX and is trading around $72.75 a barrel. Meanwhile, the benchmark yield for the 10-year US Treasury note is currently at 3.646%. Bond yields rose this week.

There are no major US economic data scheduled for release on Friday.

Technically, the gold futures bulls have the overall near-term technical advantage but it is fading fast. The upward trend in the price has been invalidated on the daily bar chart. The price has started to move downwards on the daily bar chart. The next bullish price target for the bulls is to achieve a close in the June futures contract above the strong resistance at the May high of $2,085.40. The bears’ next bearish price target in the near term is pushing futures prices below the strong technical support level at $1,900.00. We see the first resistance at $1,975.00 and then at $1,980.00. The first support appears at this week’s low at $1,954.40 and then at $1,950.00. Wyckoff Market Rating: 6.0

The Silver Bears have the overall technical advantage in the near term. The price is heading downwards on the daily chart. The next upside price target for the silver bulls is for the July futures price to close above the strong technical resistance at $25.00. The next downtrend price target for the bears is to close the price below the strong support level at $22.00. We see first resistance at $24.00 and then this week’s high at $24.395. Next support appears at this week’s low of $23.485 and then $23.00. Wyckoff Market Rating: 4.0.