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Price gains for gold, silver after hotter U.S. inflation data

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(Kitco News) - Gold and silver prices rallied to their daily highs in the aftermath of a U.S. consumer price index report that was hotter than expected and further stokes worries about problematic inflation. June gold futures were last up $14 at $1,746.70 and May Comex silver was last up $0.583 at $25.45 an ounce.

The March consumer price index report showed a rise of 0.6% from February and up 2.6%, year-on-year. CPI was expected to come in at up 0.5% from February and up 2.5%, year-on-year. The warmer-than-expected CPI report follows last week’s producer price index report that came in much-hotter-than-expected. Both the CPI and PPI add fuel to notions that inflation is rising faster than many had reckoned.

News this morning that the U.S. Food and Drug Administration has halted the single-dose Johnson and Johnson Covid vaccine distribution due to blood-clotting occurring in a very few vaccine recipients has so far had little impact on the metals markets, although the U.S. stock market did see a mild, brief sell off on the news.

Global stock markets were mostly up overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins, on some routine chart consolidation from recent gains that put the indexes at record highs. Trader and investor attitudes remain generally upbeat, which means the stock market is viewed as the best game in town.

In overnight news, China got some more economic data that suggested the world’s second-largest economy continues to surge ahead. China’s March exports were up 30.6%, year-on-year, while its imports rose 38.1%.

The price of Bitcoin rose to a new record Tuesday, above $63,000, as it appears Wall Street is embracing the crypto currency world, after dragging its feet on the matter for years. The “Coinbase” exchange is expected to start trading on the Nasdaq this week.

The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil prices are firmer and trading around $60.30 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.687%.

Other U.S. economic data due for release Tuesday includes the NFIB small business index, weekly chain store sales, the weekly Goldman Sachs and Johnson Redbook retail sales reports, and real earnings. Several Federal Reserve officials are also slated to speak today.

Live 24 hours gold chart [Kitco Inc.]

Technically, the June gold futures bears have the overall near-term technical advantage. However, a price downtrend on the daily chart has stalled out and more price gains in the near term would confirm a bullish double-bottom reversal pattern that would be another chart clue that a market bottom is in place. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at this week’s high of $1,746.20 and then at $1,750.00. First support is seen at the overnight low of $1,723.20 and then at last week’s low of $1,721.60. Wyckoff's Market Rating: 3.0.

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bears have the overall near-term technical advantage. Prices are in a nine-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $26.74 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $23.74. First resistance is seen at this week’s high of $25.33 and then at last week’s high of $25.675. Next support is seen at the overnight low of $24.68 and then at $24.50. Wyckoff's Market Rating: 3.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.