(Kitco News) - Gold prices are sharply higher and are challenging the key $1,100.00 level in early U.S. trading Friday. More safe-haven buying interest and short covering in the futures market are featured as the U.S. stock market is poised to open up sharply lower. There is also more uncertainty as U.S. traders and investors head into a three-day holiday weekend. The U.S. dollar index is solidly lower on this day, which is also working in favor of the precious metals market bulls. February Comex gold was last up $21.00 at $1,094.60 an ounce. March Comex silver was last up $0.342 at $14.095 an ounce.
There is once again keen risk aversion in the world marketplace Friday. Most world stock markets are under pressure today, on worries about weakness in the world’s major economies and about the specter of price deflation as crude oil prices trade below $30.00 a barrel. China’s stock market once again sold off sharply Friday, dropping 3.6% on the day. The Shanghai stock index is now in bear market territory, having lost over 20% from its high-water mark hit in 2015.
U.S. stock indexes are pointed toward sharply lower openings Friday morning and are poised to give back most of Thursday’s solid price gains. Weekly low closes in the U.S. stock indexes Friday would be another bearish technical clue that there is more blood-letting to come.
A fresh batch of U.S. economic data released this morning was not optimistic, which added to the downside pressure on U.S. stock indexes is preopening trading, and which in turn allowed the safe-haven gold market to extend its earlier gains.
In overnight news, reports said the United Nations’ nuclear watchdog is expected to give the green light on lifting sanctions on Iran’s oil exports, which would only add to an already glutted world oil market.
There is a Wall Street Journal survey just out that shows economists believe there is a 17% chance the U.S. will enter into recession in 2016. That’s the highest percentage expecting recession in three years.
There is a heavy slate of U.S. economic data due for release Friday, which could move the markets. The reports include the producer price index, retail sales, the Empire State manufacturing survey, industrial production and capacity utilization, manufacturing and trade inventories, and the University of Michigan consumer sentiment survey.
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