Gold, silver supported by weaker USDX, solid rise in crude oil
(Kitco News) - Gold and silver prices are posting moderate gains near midday Wednesday, boosted by friendly outside markets that include a weaker U.S. dollar index and solid gains in crude oil prices. Another hot U.S. inflation report that is seen as problematic for consumers and the economy is also longer-term friendly for the metals markets. June gold futures were last up $10.50 at $1,851.40 and July Comex silver was last up $0.346 at $21.765 an ounce.
The U.S. data point of the week saw the consumer price index report for April come in at up 8.3%, year-on-year. The number was expected to come in at up 8.1%. In March, the PPI rose 8.5% from a year earlier. Inflation running at a 40-year high remains a main concern for traders and investors, along with the ongoing Russia-Ukraine war and Covid lockdowns in China. Gold and silver prices did back down a bit from their moderate gains seen just before the CPI report was released. The data falls into the camp of the U.S. monetary policy hawks, who want to see a more aggressive pace of U.S. interest rate increases from the Federal Reserve. However, veteran metals traders know that rising inflation is historically bullish for hard assets and bearish for paper assets.
Global stock markets were mostly higher overnight. U.S. stock indexes are mixed at midday and lost overnight gains after the hot U.S. inflation data. The S&P 500 and Nasdaq futures markets hit 12-month lows Tuesday and are in solid near-term price downtrends, suggesting the path of least resistance for the indexes will remain sideways to lower.
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The key outside markets today see Nymex crude oil futures prices solidly up and trading around $104.85 a barrel. Meantime, the U.S. dollar index is weaker in midday trading. The yield on the 10-year U.S. Treasury note is fetching around 3.0%.
Technically, June gold futures prices hit a three-month low early on today. A two-month-old price downtrend line is in place on the daily bar chart. Bears have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at Tuesday’s high of $1,864.70 and then at $1,875.00. First support is seen at today’s low of $1,830.60 and then at $1,815.00. Wyckoff's Market Rating: 3.5
July silver futures prices hit an eight-month low Tuesday. A steep price downtrend is in place on the daily bar chart. The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $20.00. First resistance is seen at Tuesday’s high of $22.085 and then at this week’s high of $22.395. Next support is seen at $21.50 and then at this week’s low of $21.155. Wyckoff's Market Rating: 1.5.
July N.Y. copper closed up 650 points at 421.80 cents today. Prices closed nearer the session high today saw short covering after hitting a nearly five-month low Monday. The copper bears have the firm overall near-term technical advantage. A steep price downtrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at last week’s high of 444.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 411.05 cents. First resistance is seen at this week’s high of 425.80 cents 430.00 cents. First support is seen at this week’s low of 412.40 cents and then at 411.05 cents. Wyckoff's Market Rating: 2.5.