Gold, silver show strong price increases on “inflation trading”

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(Kitco News) – Gold and silver prices traded sharply higher in early U.S. trading Friday, following a wild session Thursday in which the price of yellow metal was at one point above $ 30 and at another above $ 25 It seems that at the end of the week, metal traders seem to be focusing on the bullish aspects of the “inflation trade” that have resurfaced after the very dull speech by Fed Chairman Jerome Powell on US monetary policy delivered Thursday morning . October gold futures were $ 37.50 a year ago at $ 1,962.50. September Comex silver prices were last $ 0.74 at $ 27,765 an ounce.

Global stocks were mixed overnight. US stock indices are also pointing to mixed weaker openings as the New York session begins. US stock indices have had a very good week, with the Nasdaq and S&P holding record highs and being on track for the best week in two months.

The market continues its speech by Powell on Thursday, outlining the US Federal Reserve’s new strategy to loosen its inflation guidelines and focus more on more employment. Most market watchers are now counting on the US interest rate for a very long time low. The shift in Fed policy will most likely resume “inflation trading,” which has historically been entirely for hard assets such as raw materials. In recent years, the prospects for very low inflation and even deflation have had many prices on the land market.

The Japanese yen appreciated against the greenback Friday on news that Japanese Prime Minister Abe is resigning due to health reasons.

The U.S. Republican convention ended Thursday, with the market not paying much attention to the event this week.

European equities were weaker on Friday as Covid-19 cases rose again in much of Europe.

The major foreign markets today see Nymex crude oil prices close to steady and trading at $ 43.00 a barrel. Hurricane Laura struck Texas and Louisiana, shutting down much of the Gulf’s oil and gas installations. That pushed the future prices of gasoline to a five-month high this week. The US dollar index is down and back close to its recent two-year low. The yield on the 10-year note of the US Treasury is about 0.75% today. Bond yields have increased this week, amid better attitude from traders and investor risk in recent better-than-expected U.S. economic data.

U.S. economic data released for release Friday includes personal income and expenses, ahead of economic indicators, ISM Chicago’s business survey, and the University of Michigan’s consumer sentiment survey.

Technically, the gold bulls still have the solid overall technical advantage in the short term, amid recent hard trading. Prices are still in an uptrend on the daily bar chart. Bulls’ next target for rising price is to produce futures above solid resistance at $ 2,000.00 in October. The next target of the bearish price for the Bears in the long run pushes future prices under solid technical support at $ 1,900.00. Initial resistance is seen at this week’s high of $ 1,978.50 and then at $ 2,000.00. Initial support is seen at night low of $ 1,921.20 and then at this week low of $ 1,901.40. Wyckoff’s Market Rating: 7.5

Silver future bulls of September have the solid technical advantage in the short term. A bullish symmetrical triangle pattern is formed on the daily bar chart. Prices are still in a general price increase on the daily bar chart. Silver Bulls’ next rising price target is closing prices above solid technical resistance at the August high of $ 29,915 an ounce. The next target for disadvantage price for the bears is closing prices under solid support at the August low of $ 23.58. Initial resistance is seen at this week’s high of $ 28,035 and then at $ 28,605. Next support is seen at night low of $ 26.89 and then at $ 26,095. Wyckoff’s Market Rating: 7.5.