Gold price up amid weakening USDX down-tick in US bond yields

Gold price up amid weakening USDX, down-tick in U.S. bond yields

Gold and silver prices are moderately higher in early U.S. trading Friday, with silver hitting a 2.5-month high. The precious metals are supported on this last trading day of the week by a lower U.S. dollar index and a decline in U.S. Treasury yields. The near-term technical postures for gold and silver have improved this week, which is inviting chart-based bulls to the long sides of those metals. December gold was last up $6.10 at $1,993.40. December silver was last up $0.207 at $24.14.

It’s been an extra important trading week that is just winding down. U.S. inflation data was tamer, as was that from the U.K. Reads a Wall Street Journal headline today: “Global inflation fight turns a corner.” Trader and investor risk appetite was boosted this week, evidenced by the U.S. stock indexes hitting multi-week highs. After the tame U.S. inflation data earlier this week, the marketplace now expects the Federal Reserve has finished its interest-rate-increase cycle. There are growing notions the Fed will even lower interest rates in the spring. Lower global interest rates are bullish for the metals, suggesting better consumer and commercial demand amid lower borrowing costs.

Asian and European markets were mixed in overnight trading. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins.

In overnight news, the Euro zone October consumer price index was reported up 2.9%, year-on-year, which was in line with market expectations.

Nymex crude oil prices are higher and trading around $73.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.406%.

U.S. economic data due for release Friday is light and includes new residential sales.

Technically, the gold futures bulls have the slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,996.40 and then at $2,000.00. First support is seen at the overnight low of $1,983.90 and then at $1,975.00. Wyckoff's Market Rating: 5.5.

The silver bulls have the overall near-term technical advantage and have momentum. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.50. First resistance is seen at the overnight high of $24.22 and then at $24.50. Next support is seen at the overnight low of $23.805 and then at Thursday’s low of $23.35. Wyckoff's Market Rating: 6.0.

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Jim Wyckoff

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