Gold prices down on corrective pullback heading into weekend

London (Mar 27)  Gold prices are trading sharply lower in early U.S. trading Friday, on a downside correction from this week’s solid gains, and ahead of another uncertain weekend that is keeping buyers in many markets sidelined Friday morning. April gold futures were last down $29.70 an ounce at $1,622.10. May Comex silver prices were last down $0.106 at $14.57 an ounce.

Global stock markets were mixed to firmer in overnight trading, following the big U.S. stock market gains Thursday. U.S. stock index futures are presently pointed toward sharply lower openings when the New York electronic day session begins, also on a corrective pullback following this week’s very strong gains. The global equity markets have been boosted in part late this week as the U.S. Congress is on the verge of passing a $2.2 trillion financial aid package for U.S. businesses and citizens. However, any trader/investor watching the evening national news cannot come away with a good feeling, as the U.S. has passed all other countries in Covid-19 cases and New York’s health care system is in crisis and straining to keep up with coronavirus cases. Other states are also seeing an alarming rise in new Covid-19 cases. Reports today said U.K. Prime Minister Boris Johnson has tested positive for Covid-19.

Heading into another uncertain weekend, its likely traders and investors are not going to be in hearty buying moods. Still, if the U.S. stock indexes can avoid major losses Friday, then this week’s strong gains in the U.S. indexes do begin to suggest they have put in market bottoms.

The important outside markets today see Nymex crude oil prices weaker and trading around $22.25 a barrel. The U.S. dollar index is firmer on a mild corrective bounce after this week’s strong losses. The 10-year U.S. Treasury note yield is trading around 0.075% Friday morning, down from Thursday’s level.

U.S. economic data due for release Friday includes personal income and outlays and the University of Michigan consumer sentiment survey.

Technically, the gold bulls have the overall near-term technical advantage with this week’s big gains. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the March high of $1,704.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at Tuesday’s low of $1,560.50.


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