Gold and silver experience strong price rebounds on “inflation trade”


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(Kitco News) – Gold and silver prices are trading significantly earlier on Friday in the United States, after a wild session on Thursday, in which the price of the yellow metal rose by more than $ 30 to one time and over $ 25 at another. It looks like metals traders to end the week are focusing on the bullish aspects of “inflationary trading” that was revived after Fed Chairman Jerome Powell’s very accommodating speech on US monetary policy on Thursday morning. October gold futures were up $ 37.50 an ounce to $ 1,962.50. September’s Comex silver prices last rose $ 0.74 to $ 27.765 an ounce.
Global stock markets were mixed overnight. US equity indices also point to weaker mixed openings at the start of the New York session. The US stock indexes have had a very good week with the Nasdaq and S&P hitting record highs and are on track for the best week in two months.
The market is still digesting Powell’s speech on Thursday, in which he described the US central bank’s new strategy to ease its inflation guidelines and focus more on full employment. Most market watchers now believe that US interest rates will stay low for a very long time. The Fed’s policy change is likely to revive “inflation trading,” which has always been bullish for durable assets like commodities. In recent years, the outlook for very low inflation and even deflation had muzzled the prices of many commodities.
The Japanese yen appreciated against the greenback on Friday on news of Japanese Prime Minister Abe’s resignation on health grounds.
The Republican U.S. convention ended on Thursday, with the market paying little attention to the event this week.
European stocks were weaker on Friday as cases of Covid-19 are on the rise again across much of Europe.
Important foreign markets today see Nymex crude oil prices close to stability and trading around $ 43.00 per barrel. Hurricane Laura hit Texas and Louisiana and shut down most oil and gas facilities on the US Gulf Coast. This pushed gasoline futures prices to a five-month high this week. The US dollar index falls and returns to near its recent two-year low. The yield on the 10-year US Treasury note is currently trading around 0.75%. Bond yields rose this week, amid better risk attitudes among traders and investors amid recent better-than-expected US economic data.
U.S. economic data due for release Friday includes personal income and spending, leading economic indicators, the Chicago ISM Business Survey and the University of Michigan Consumer Sentiment Survey.

Technically, the Gold Bulls still have the overall firm technical advantage in the near term, amid recent choppy trading. Prices are still in an uptrend on the daily bar chart. The next bull price target is to produce an October futures close above the strong resistance at $ 2,000.00. The next short-term bearish price drop target for the Bears is to push futures prices under strong technical support at $ 1,900.00. First resistance is seen at this week’s high of $ 1,978.50 and then $ 2,000.00. First support is seen at overnight low of $ 1,921.20 followed by this week’s low of $ 1,901.40. Wyckoff Market Rating: 7.5

24 hour live money graph [ Kitco Inc. ]

September silver futures bulls have a strong overall short-term technical advantage. A bullish symmetrical triangle pattern has formed on the daily bar chart. Prices are still in an overall uptrend on the daily bar chart. The next bullish price target for Silver Bulls is to close prices above strong technical resistance at the August high of $ 29.915 an ounce. The next lower price target for the bears is to close prices below solid support at the August low of $ 23.58. First resistance is seen at this week’s high at $ 28.035 and then at $ 28.605. The next support is seen at the overnight low of $ 26.89 and then at $ 26.095. Wyckoff Market Rating: 7.5.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept guilt for any loss and / or damage resulting from the use of this publication.


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