Gold prices are experiencing a rise, and silver is also slightly up in early U.S. trading on Friday, driven by increased safe-haven demand amid ongoing tensions in the Middle East. A weaker U.S. dollar index is also supporting the metals markets. February gold is up $14.80 at $2,036.40, while March silver is up $0.148 at $22.955.
The international stock markets have seen mixed to firmer activity overnight, with U.S. stock index futures set to open higher, signaling a late-week rally with major U.S. stock indices at or near 12-month highs. Despite the heightened tensions in the Middle East, risk aversion appears to have decreased. Just as with the Russia-Ukraine war, it seems that after three months of the Israel-Hamas conflict, traders and investors have become desensitized from a financial markets point of view.
The U.S. dollar index is weaker, while Nymex crude oil prices are holding steady at around $74.00 per barrel, and the yield on the benchmark U.S. Treasury 10-year note is fetching 4.128%. Economic data due out on Friday includes existing home sales, Treasury international capital data, and the University of Michigan consumer sentiment survey.
From a technical perspective, gold futures bulls still have the near-term advantage with prices in a three-month-old uptrend. This has resulted in a strong price objective for the bulls of closing March futures above solid resistance at this week’s high of $2,062.80. On the other hand, silver bears hold the near-term technical advantage, with prices in a choppy, five-week-old downtrend. The next downside price objective for the silver bears is a close below solid support at the November low of $22.26.
Additional Insight: It’s interesting to note that despite escalating geopolitical tensions and lingering concerns over the impact of war on global economies, financial markets seem to be increasingly shaking off these events. This phenomenon may reflect market participants’ fatigue with geopolitical uncertainty. Despite the near-term technical advantage gold and silver hold, the desensitization of markets may signify a broader shift in investors’ perceptions of risk dynamics and their potential influence on asset prices. Therefore, as we move forward, it will be essential to monitor how these increasingly apparent trends may affect market behavior and the broader economic outlook.
