Gold and Silver Prices Affected by Central Bank Policies
Gold prices are modestly up and silver slightly lower in early U. S. trading Friday. Both markets hit three-month lows overnight. The precious metals bulls are still suffering the bearish effects of central bankers that this week kept the hammer down on tight monetary policies that will likely squelch global demand for metals and keep government bond yields elevated. August gold was last up $5.40 at $1,929.10 and July silver was up $0.092 at $22.375.
Global Stock Markets Show Downtrend
Global stock markets were mostly lower overnight. U. S. stock indexes are pointed toward lower openings when the New York day session begins. Central bankers this week, save for China, reinforced their hawkish tones on monetary policies. That’s also bearish for many other markets, including stocks and other commodities.
Euro Zone PMI Data
In overnight news, the Euro zone manufacturing purchasing managers index (PMI) for June came in at 43.6, which was lower than expectations. The June services PMI reading was 52.4, also below expectations. A reading below 50.0 suggests contraction in the sector, and above 50.0 suggests growth.
U.S. Dollar Index and Crude Oil Prices
The key outside markets today see the U. S. dollar index solidly higher. Nymex crude oil prices are lower and trading around $68.75 a barrel. These two outside markets are in a bearish daily posture for the metals markets. A Dow Jones Newswires headline today reads: “Oil falls as global interest rates rise.” Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.746%.
U. S. Economic Data Release
U. S. economic due for release Friday includes the U.S. flash and services purchasing managers indexes.
Technical Analysis of Gold and Silver Futures
Technically, the gold futures bears have the slight overall near-term technical advantage. A six-week-old price downtrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in August 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 Thursday’s high of $1,945.10 and then at $1,950.00. First support is seen at the overnight low of $1,919.50 and then at $1,910.00. Wyckoff’s Market Rating: 4.5
The silver bears have the overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at Thursday’s high of $22.75 and then at $23.00. Next support is seen at the overnight low of $22.14 and then at $22.00. Wyckoff’s Market Rating: 4.0.