(Kitco News) - Gold and silver prices are sharply up and near their daily highs in midday U.S. trading Thursday, with gold prices notching record highs. Bullish fundamental developments this week are boosting the precious metals markets. Firmly bullish technicals are also driving speculator buying interest into gold. December gold was last up $33.90 at $2,576.30 and December silver was up $1.142 at $30.07.
The U.S. data point of the day saw the producer price index for August come in at up 0.2% from July versus expectations for a 0.2% rise and compares to up 0.1% seen in the July report, from June. The “core” August PPI (excluding food and energy) came in at up 0.3% from July and was seen coming in at up 0.2% after being unchanged in the July report. The tame PPI report today follows Wednesday’s as-expected consumer price index report that was also tame.
Meantime, the European Central Bank today lowered its main interest rate by 0.25%, to 3.5%. The rate cut was expected by the marketplace. It’s widely expected the Federal Reserve will lower its main interest rate next week.
Tamer inflation and lower interest rates, which work to lower bond yields, are working in favor of the gold and silver markets bulls. Lower U.S. Treasury yields and ideas of lower U.S. interest rates have also worked to weaken the U.S. dollar, and that’s also friendly for gold and silver.
U.S. stock indexes are up a bit in midday trading.
The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are solidly higher on short covering after hitting a 16-month low Tuesday, and trading around $69.00 a barrel. A hurricane in the Gulf of Mexico has shut in some crude production in the region. The International Energy Agency today said global oil demand growth continues to decelerate. The benchmark 10-year U.S. Treasury note yield is on the decline and is presently fetching around 3.7%.
Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,600.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,500.00. First resistance is seen at the contract and record high of $2,583.60 and then at $2,600.00. First support is seen at $2,550.00 and then at today’s low of $2,538.70. Wyckoff's Market Rating: 9.5.
December silver futures bulls have gained the overall near-term technical advantage with this week’s gains. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $30.67. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $30.67 and then at $31.00. Next support is seen at $29.55 and then at $29.00. Wyckoff's Market Rating: 6.0.
(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Sign up here; it’s real easy. https://www.kitco.com/services
