Gold prices not straying far from unchanged levels in early U.S. trading Friday. Prices did poke to a nine-week high overnight. Traders are taking a breather after Thursday’s price action that saw gold gain nearly $50.00 and silver add over $1.00 in value. It’s been a very good week for the gold and silver market bulls, and they still have technical momentum on their side. August Comex gold was last down $1.00 at $1,313.00 an ounce. Spot gold was last quoted down $7.40 at $1,313.50. July Comex silver last traded up $0.107 at $20.76 an ounce.
The civil war in Iraq remains a major market factor and continues to prompt risk aversion among traders and investors. The risk aversion is scattered however. While the S&P 500 stock index hit a new record high on Thursday (risk on), gold prices rose by nearly $50 an ounce (risk off). It’s doubtful this disparity will continue and may be resolved early next week. The U.S. is sending 300 special ops forces to Iraq, and has not ruled out the use of air power against the rebels. Meantime, reports said Russian troops are massing on its border with Ukraine again. Maybe Russian president Putin reckons he can consolidate his recent land grab during another geopolitical crisis, so as to take some of the negative attention away from him.
Crude oil prices have rallied sharply recently on worries about Iraqi crude oil exports being reduced, and on concerns the violence in Iraq could spread to other Arab nations. The U.S. dollar index hit a four-week low Thursday in the wake of dovishly construed U.S. monetary policy comments from Fed Chair Janet Yellen on Wednesday. These two key “outside markets” are in a near-term bullish posture for the precious metals and other raw commodity markets.