(Kitco News) - Gold prices are posting sharp gains and hit a record high of $2,264.20 an ounce, basis nearby Comex futures, in early U.S. trading Monday. Silver prices are posting decent gains, too. The precious metals are seeing buying support following a mild U.S. inflation report released last Friday, when U.S. markets were closed for a holiday. June gold was last up $31.50 at $2,269.90. May silver was last up $0.244 at $25.16.
Stock and financial markets overnight are buoyed by last Friday’s report that the U.S. PCE price Index was up 0.3% in February compared to the previous month. The rise was slightly lower than the revised 0.4% increase in January and fell short of market forecasts for a 0.4% increase. The annual rate of PCE inflation rose marginally from 2.4% to 2.5%, aligning with forecasts. However, when considering the monthly core PCE inflation, which excludes volatile components such as food and energy and is a preferred measure of inflation by the Federal Reserve, there was a deceleration. The core PCE inflation rate slowed to a 0.3% rise from a revised 0.5% rise in January, matching the anticipated rate. This report favors the U.S. monetary policy doves, who want to see the Federal Reserve cut interest rates sooner rather than later.
Asian and European stock indexes were mixed to firmer overnight. Several European markets remained closed for the Easter holiday. U.S. stock indexes are pointed toward higher openings and at or near record highs when the New York day session begins and on this first day of April.
In overnight news, China’s manufacturing purchasing managers index (PMI) for March came in at 50.8 from 49.1 in February and beat market expectations. A reading above 50.0 suggests expansion in the sector. Reads a Wall Street Journal headline today: “China’s manufacturing data reflect upturn, but host of hurdles remain.”
The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are weaker and trading around $83.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.20%.
U.S. economic reports due for release Monday include the U.S. manufacturing purchasing managers index (PMI), the ISM report on business manufacturing and construction spending.
Technically, the gold futures bulls have the strong overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,300.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. First resistance is seen at the overnight contract high of $2,286.40 and then at $2,300.00. First support is seen at the overnight low of $2,255.50 and then at $2,246.60. Wyckoff's Market Rating: 9.0.
The silver bulls have the overall near-term technical advantage. Bulls are working to revive a six-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at the March high of $25.975. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at the overnight high of $25.415 and then at $25.975. Next support is seen at $25.00 and then at $24.75. Wyckoff's Market Rating: 6.5.
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