Gold, silver prices rise on short covering, outside the market favorable

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(Kitco News)- Gold and silver prices are higher in early US trade on Friday amid short-covering in futures markets following recent selling pressure and a fall in US Treasury yields and a fall in the US dollar index on the day. April gold was last up $11.60 at $1,851.90 and May silver was up $0.274 at $21.17.

Global stock markets strengthened mostly overnight. US stock indices point to a firmer open at the start of the New York day session. US stock indices are trending down at prices on the daily bar charts.

The general market has recently been dealing with the realization that problematic global inflation is likely to hang around longer than traders and investors initially expected or hoped. That perception has dampened trader and investor risk appetite recently. Today’s Wall Street Journal headline reads: “World economy doing well; it’s bad news for central bankers.

In overnight news, the governor of China’s central bank has indicated that the bank will ease its monetary policy by cutting the banks’ reserve requirement ratio to support the Chinese economy.

Meanwhile, the euro zone received some mixed inflation news as its producer price index fell 2.8% in January but was up 15.0% year-on-year. Those numbers were less hot than expected.

The US Dollar Index is looking weak in the major markets outside this morning. Nymex crude oil futures are down slightly and trading near $78.00 per barrel. The yield on the benchmark US 10-year Treasury note is currently yielding 4.007%.

US economic data to be released on Friday include the US Services Purchasing Managers’ Index (PMI), the ISM Report on Business Services and the Global Services PMI.

Technically, gold futures bulls and bears are back in overall near-term technical play levels. The downtrend has been negated on the daily bar chart. The next upside price objective for the bulls is a close above the solid resistance of $1,900.00 in April futures. The bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at last week’s high at $1,856.40 and then at $1,870.00. First support is seen at the overnight low of $1,842.00 and then at $1,825.00. Wyckoff’s market rating: 5.0.

Silver bears have overall near-term technical advantage. There is a huge downtrend in the price on the daily bar chart. The next upside price objective for silver bulls is closing May futures above solid technical resistance at $22.25. The next downside price objective for the bears is a close below the solid support at $19.00. The first resistance is seen at this week’s high at $21.285 and then at $21.52. The next support is seen at Thursday’s low of $20.76 and then at this week’s low of $20.505. Wyckoff’s market rating: 4.0.