(Kitco News) - Gold and silver prices are lower again in early U.S. trading Friday, on follow-through pressure from strong losses Thursday, in the wake of a U.S. producer price inflation report that came in hotter than expected. Profit-taking and weak long liquidation from the shorter-term futures traders are featured in gold and silver markets late this week. February gold was last down $23.00 at $2,686.20 and March silver was down $0.399 at $31.22.
Thursday’s hot PPI report likely won’t stop the Federal Reserve from cutting interest rates next week at its FOMC meeting, but it has called into question the Fed’s monetary policy trajectory early in 2025. The 3% annual rise in PPI in November is a full percentage point above where the Fed would like to see annual overall U.S. inflation.
Asian and European stock indexes were mixed but mostly lower overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins.
In overnight news, Chinese stock markets dropped as authorities left investors guessing on the specifics of an economic stimulus plan. The benchmark index snapped a two-week winning streak while bond yields are near record lows on the promise of easier monetary policy from China officials.
The U.K. economy contracted for a second straight month. Brits are bracing for a stringent budget. Bloomberg reports Pimco and Fidelity are among a growing number of investors who believe “the darkening economic outlook in Europe may force policymakers to cut interest rates more than the market expects.”
NATO Secretary General Mark Rutte has warned Russian President Putin wants to “wipe Ukraine off the map” and could come after other parts of Europe next, according to an AP report. Rutte urged Europeans to press their governments to ramp up defense spending.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are firmer and trading around $70.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.336%.
U.S. economic data due for release Friday includes import and export prices.
Technically, February gold bulls have the overall near-term technical advantage but have faded. 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 this week’s high of $2,761.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,629.70. First resistance is seen at $2,700.00 and then at the overnight high of $2,716.40. First support is seen at the overnight low of $2,683.00 and then at $2,665.00. Wyckoff's Market Rating: 6.5.
March silver futures bulls have the overall near-term technical advantage but have faded. Silver bulls' next upside price objective is closing prices above solid technical resistance at this week’s high of $33.33. The next downside price objective for the bears is closing prices below solid support at $30.00. First resistance is seen at the overnight high of $31.63 and then at $32.00. Next support is seen at $31.00 and then at $30.50. Wyckoff's Market Rating: 6.0.
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