Gold price firms up in wake of tamer U.S. PPI data

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(Kitco News) - Gold prices are moderately higher in early U.S. dealings Thursday, in the immediate aftermath of another U.S. inflation report that came in tamer than market expectations. June gold was last up $9.50 at $2,046.00 and July silver was down $0.448 at $25.22.

The U.S. data point of the day saw the producer price index report for April come in at up 0.2%, versus expectations for up 0.3% from March, and compares to a drop of 0.5% in the March report, month-on-month. Meantime, the weekly U.S. jobless claims report showed claims jumped in the latest week, at up 264,000 versus the expected rise of 245,000. These two reports fall into the camp of the U.S. monetary policy doves, who would like to see the Federal Reserve stop is interest-rate-increase cycle.

Global stock markets were mostly firmer overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. Traders and investors are still monitoring the U.S. debt-limit-extension rhetoric coming from lawmakers. President Biden meets with congressional leaders again Friday, after little progress was made in a meeting earlier this week. U.S. Treasury Secretary Yellen said its doubtful the Biden administration could avoid a government default without Congress agreeing on a plan to deal with the debt matter.

The Bank of England met Thursday on its monetary policy, with the BOE raising its main interest rate by 0.25%, as expected.

In overnight news, China’s inflation fell to the lowest level in two years, as the April consumer price index rose 0.1%, year-on-year. That compares to a rise of 0.7% in the March report.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $72.25 a barrel. Meantime, the benchmark 10-year U.S. Treasury note yield is presently fetching 3.36%--down a bit following the PPI and jobless claims data.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report.

Technically, the gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at this week’s high of $2,056.00 and then at $2,063.40. First support is seen at this week’s low of $2,022.00 and then at $2,007.00. Wyckoff's Market Rating: 8.0.

The silver bulls have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $27.50. The next downside price objective for the bears is closing prices below solid support at $24.50. First resistance is seen at today’s high of $25.70 and then at $26.00. Next support is seen at $25.00 and then at $24.735. Wyckoff's Market Rating: 7.5.