Gold, Silver Up On Safe-Haven Demand, Weaker U.S. Dollar, Tame U.S. CPI
(Kitco News) - Gold and silver prices are moderately higher in early U.S. trading Thursday. The metals are seeing support from a bit of safe-haven demand, a slightly lower U.S. dollar index, a tame U.S. inflation report, and some short covering in the futures markets. June Comex gold futures were last up $8.30 an ounce at $1,321.20. July Comex silver was last up $0.196 at $16.73 an ounce.
The U.S. economic highlight today saw the just-released consumer price index for April come in at up 0.2%, month-on-month and up 2.5%, year-on-year. The numbers were expected to come in up 0.3% from March, and up 2.5% at an annual rate. The “core” CPI rate, excluding food and energy, was up 0.1% in April from March, and up 2.1%, year-on-year. The core rate rose 0.2% in the March report. Gold and silver prices moved higher on this data, on ideas the Federal Reserve may not have to be so aggressive on raising U.S. interest rates, what with low inflationary expectations.
The overall marketplace is not seeing a significant reaction from renewed Syria-Israeli military action, as both sides conducted air strikes against the other the past 24 hours. Still, it appears the Middle East has once again become a geopolitical flashpoint for the markets. Right now, that’s a mildly bullish element for safe-haven gold and silver, but could become more significantly bullish if the situation escalates.
World stock markets were mixed overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
The conclusion of the Bank of England’s regular monetary policy meeting today saw no change in U.K. interest rates, which was expected by the marketplace.
The “outside markets” today find Nymex crude oil prices modestly higher, at a new 3.5-year high, and trading near $72.00 a barrel. The U.S. dollar index is slightly lower on profit taking after hitting a 4.5-month high Wednesday.
Other U.S. economic data due for release Thursday includes the weekly jobless claims report, real earnings, the monthly Treasury budget statement and monthly chain store sales.
Technically, June gold 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 $1,338.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at $1,325.00 and then at $1,330.00. First support is seen at this week’s low of $1,304.20 and then at the May low of $1,302.30. Wyckoff's Market Rating: 5.0
July silver futures prices hit a two-week high overnight, but the bears still have the slight overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 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 $17.00. Next support is seen at the overnight low of $16.50 and then at this week’s low of $16.335. Wyckoff's Market Rating: 4.5.