Gold Prices Firm Up After U.S. CPI Meets Market Expectations
(Kitco News) - Gold prices are up in early U.S. trading Tuesday, and have erased modest overnight losses. The just-released U.S. consumer price index report posted numbers that were in line with market expectations, which was a relief to those traders and investors who were worried about hotter inflation. April Comex gold futures were last up $4.10 an ounce at $1,325.00. May Comex silver was last up $0.119 at $16.670 an ounce.
The key economic data point of the day Tuesday saw the U.S. consumer price index report for February come in at up 0.2%, and up 2.2%, year-on-year. Those numbers were in line with market expectations. The “core” CPI number - which excludes food and energy - was also up 0.2% from January and up 1.8%, year-on-year.
Inflation readings from the world’s major economies have been creeping up recently, which has caused a bit of concern among traders and investors. However, with most of the world inflation data being reported near or just above a 2.0% rise recently, most agree there is no cause for alarm. Most major central banks of the world actually want to see an annual inflation rate of right around 2.0%.
Reports that U.S. Secretary of State Rex Tillerson has either quit or been fired may also be adding a bid to the safe-haven gold and silver markets.
The key “outside markets” on Tuesday morning see the U.S. dollar index slightly lower and off the overnight high after the CPI report came out. Meantime, Nymex crude oil prices are lower. Rising U.S. shale oil production and some reported discord among OPEC leaders Saudi Arabia and Iran have put the crude oil market on the defensive recently.
Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index and real earnings.
Technically, April gold futures bulls and bears are on a level overall near-term technical playing field. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at $1,330.00 and then at $1,335.00. First support is seen at last week’s low of $1,313.20 and then at $1,309.00. Wyckoff's Market Rating: 5.0
May silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the February high of $17.04 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.00. First resistance is seen at $16.75 and then at the March high of $16.895. Next support is seen at this week’s low of $16.43 and then at last week’s low of $16.33. Wyckoff's Market Rating: 4.0.