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Gold gains in wake of rising U.S. inflationary pressures

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(Kitco News) - Gold prices are moderately up in midday U.S. trading Tuesday, while silver prices are near steady. The U.S. economic data point of the day saw the June consumer price index report up 0.9% from May and up 5.4%, year-on-year. Those numbers were significantly hotter than expected. Some other U.S. and global inflation readings have also been running hot lately. The CPI news initially put some price pressure on gold and silver, as the U.S. dollar index rallied on the report and bond yields ticked up. However, metals traders then looked at the longer-term ramifications of rising inflation and reckoned that's actually bullish for the metals. Also, the USDX lost some of its early CPI-induced gains and U.S. Treasury yields also backed down from their daily highs, which also prompted some fresh buying interest in the metals. August gold futures were last up $8.20 at $1,814.00 and September Comex silver was last down $0.004 at $26.235 an ounce.

Global stock markets were mostly higher overnight. The U.S. stock indexes are narrowly mixed at midday and at or near record highs. The global markets are still not paying serious attention to the new Covid-19 variant that is spreading in some parts of the world and is beginning to threaten some regional economies. Focus this week is on U.S. corporate earnings reports.

China reported surprisingly strong export data Tuesday. June exports rose 32.2% versus 27.9% in May, year-on-year and 23.0% forecast. China's imports in June rose 36.7% versus 51.1% in May and 25% forecast.

The key outside markets today see the U.S. dollar index moderately higher and in an uptrend on the daily chart, while Nymex crude oil prices are up and trading around $75.15 a barrel. The International Energy Agency overnight warned that global oil markets are set to "tighten significantly" unless there is an increase in production. With OPEC and its allies failing to reach agreement on increased output, crude oil inventories are set to fall even more. The 10-year U.S. Treasury note yield is presently fetching 1.361%.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the slight overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,850.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $1,750.10. First resistance is seen at the July high of $1,819.50 and then at $1,825.00. First support is seen at $1,800.00 and then at this week's low of $1,791.00. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at today's high of $26.44 and then at $26.75. Next support is seen at $26.00 and then at last week's low of $25.82. Wyckoff's Market Rating: 5.0.

September N.Y. copper closed down 65 points at 430.95 cents today. Prices closed nearer the session high today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at this week's high of 436.40 cents and then at the July high of 440.25 cents. First support is seen at the July low of 422.65 cents and then at 420.00 cents. Wyckoff's Market Rating: 5.5.

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.