(Kitco News) - Gold prices are sharply up and hit a nine-week high in midday U.S. trading Wednesday, following an important U.S. inflation report that was in line with market expectations. Bulls have momentum and are eyeing new record highs that are now not far from their reach. Safe-haven demand and chart-based buying remain the features in gold this week. February gold was last up $38.70 at $2,757.20 and March silver was up $0.263 at $33.01 and hit a nine-week high, too.
The U.S. data point of the week was today’s consumer price index for November, which came in at up 2,7%, year-on-year, which was right in line with market expectations and compares to a rise of 2.6% seen in the October report. Gold and silver market bulls breathed collective sigh of relief when the CPI data came in as expected and was not hot.
The Federal Reserve’s FOMC’s monetary policy meeting is next week. Today’s CPI report does not likely change the trajectory of what the Fed is thinking on its monetary policy. The CME’s FedWatch tool shows the probability of a 25 basis-point interest rate cut at around 90 percent.
Thursday comes rate decisions from the European Central Bank and Swiss National Bank. Both are expected to announce rate cuts of 25 basis points.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are higher and trading around $70.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.25%.
Technically, February gold bulls have the solid overall near-term technical advantage. A nearly four-week-old price uptrend is now in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,826.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,650.00. First resistance is seen at today’s high of $2,759.70 and then at $2,780.00. First support is seen at today’s low of $2,719.10 and then at $2,700.00. Wyckoff's Market Rating: 8.0.
March silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $34.00. The next downside price objective for the bears is closing prices below solid support at $31.00. First resistance is seen at this week’s high of $32.945 and then at $33.00. Next support is seen at Tuesday’s low of $32.305 and then at $32.00. Wyckoff's Market Rating: 6.5.
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