(Kitco News) - Gold and silver prices are strongly down in midday U.S. trading Thursday, in the aftermath of a U.S. inflation report that came in hotter than expected. However, both metals were already under selling pressure overnight, amid profit-taking from the shorter-term futures traders. February gold was last down $47.40 at $2,709.20 and March silver was down $1.217 at $31.755.
The U.S. data point of the day saw the producer price index report for November come in hot at up 0.4%, month-on-month, double the 0.2% rise expected. This follows a 0.2% rise in the October report. However, the core rate (minus food and energy) came in as expected at up 0.2 percent. The annual headline PPI reading is up 3.0%. Somewhat surprisingly, the overall marketplace did not show not reaction to the hot headline PPI number. The PPI data follows the U.S. consumer price index report on Wednesday that came in as expected. Bloomberg reported today that the CPI report “is seen as a green light for the Fed to cut rates by a quarter point next week. Inflation is still higher than policy makers would like so the pace of cuts next year is less certain.” Reads a headline just out from Barrons: “Producer inflation comes in hot. The Fed will still cut.”
The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil futures prices are near steady and trading around $70.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.304%.
Technically, February gold futures scored a big and bearish “outside day” down on the daily bar chart. Bulls still have the overall near-term technical advantage but faded today. Prices are still in an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at today’s high of $2,861.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,629.70. First resistance is seen at $2,730.00 and then at $2,750.00. First support is seen at today’s low of $2,696.70 and then at Tuesday’s low of $2,680.70. Wyckoff's Market Rating: 6.5.
March silver futures bulls have the overall near-term technical advantage but faded a bit today. Price action today scored a big and bearish “outside day” down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at today’s high of $33.33. The next downside price objective for the bears is closing prices below solid support at the November low of $30.095. First resistance is seen at $32.00 and then at $32.50. Next support is seen at today’s low of $31.495 and then at this week’s low of $31.32. Wyckoff's Market Rating: 6.0.
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