(Kitco News) - Gold and silver prices are solidly higher in early U.S. trading Wednesday following a U.S. inflation report that came in a bit cooler than expected. June gold hit a three-week high and was last up $19.10 at $2,379.00. July silver was last up $0.593 at $29.30 and hit a four-week high today.
The just-released U.S. consumer price index report for April saw CPI up 0.3% versus the consensus forecast of up 0.4% and compares to the March report showing a rise of 0.4%. The annual CPI April reading was up 3.4% and was forecast at up 3.6% and compares to up 3.8% in the March report. Traders and investors were thinking the CPI report might come in hot today, following the producer price index report for April that was out Tuesday morning and ran hot on inflation. Today’s CPI report falls into the camp of the monetary policy doves, who want to see the Federal Reserve cut interest rates sooner rather than later. That scenario is bullish for the precious metals, from a consumer and commercial demand perspective.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
In overnight news, Comex copper futures hit a new record high of $5.1280 a pound. Tighter global supplies, better world economic growth, smelter issues in China, as well as rampant market speculation, are driving the red industrial metal’s price sharply higher. Could copper be the next cocoa? Cocoa futures last year at this time were trading around $3,000 a metric ton. In April, cocoa futures reached a record high of $12,261 a ton.
The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are near steady and trading around $78.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.357% and down a bit after the CPI report.
Beside the CPI report, it’s a very busy day for U.S. economic data Wednesday, also including the weekly MBA mortgage applications survey, the Empire State manufacturing survey, retail sales, real earnings, the NAHB housing market index, manufacturing and trade inventories, the weekly DOE liquid energy stocks report and Treasury international capital data. A few Federal Reserve officials also are slated to speak today.
Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at the overnight high of $2,386.40 and then at $2,400.00. First support is seen at the overnight low of $2,360.30 and then at $2,350.00 and then at $2,330.00. Wyckoff's Market Rating: 7.5.
The silver bulls have the solid overall near-term technical advantage and have gained good power this week. Silver bulls' next upside price objective is closing July futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $27.50. First resistance is seen at $29.50 and then at $30.00. Next support is seen at $29.00 and then at the overnight low of $28.675. Wyckoff's Market Rating: 8.0
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