(Kitco News) - Gold and silver prices lost mild overnight gains and are under modest selling pressure in early U.S. trading Friday, following a hotter than expected U.S. inflation report. April gold was last down $2.40 at $2,012.10. March silver was last down $0.051 at $22.90.
The just-released U.S. producer price index report for January showed a rise of 0.3%, month-on-month. PPI was seen coming in at up 0.1% from December, compared to a 0.1% month-on-month decline in the December PPI report. The “core” PPI (excluding food and energy) was up 0.5% compared to expectations for a rise of 0.1%. Somewhat mitigating the hotter PPI report today was the just-released U.S. housing starts report in January that showed starts were down 14.8% versus expectations for a decline of only 0.7%.
Asian and European stock markets were mixed in overnight trading. U.S. stock index futures are set to open mixed when the New York day session begins.
Here’s a startling headline from the Wall Street Journal today: “The U.S. government will soon spend more on interest payments than defense.”
The key outside markets today see the U.S. dollar index higher and rallying after the hot PPI report. Nymex crude oil prices are weaker and trading around $77.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.322%, which is up from the yield seen just before the PPI report was released.
Other U.S. economic data due for release Friday includes new residential construction and the University of Michigan consumer survey.
Technically, the gold futures bears have the slight overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at $2,023.30 and then at $2,035.00. First support is seen at $2,000.00 and then at this week’s low of $1,996.40. Wyckoff's Market Rating: 4.5.
The silver bears have the firm 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 March futures prices above solid technical resistance at $23.445. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at this week’s high of $23.15 and then at
$23.445. Next support is seen at $22.50 and then at $22.00. Wyckoff's Market Rating: 3.5.
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