(Kitco News) - Gold prices are moderately higher in early U.S. trading Friday, following a U.S. inflation report that came in just a bit cooler than expected. Short covering from the shorter-term futures traders is also featured after gold hit a four-week low Thursday. February gold was last up $13.20 at $2,621.30 and March silver was down $0.041 at $29.37.
The just-released U.S. personal income and spending report for November showed the key PCE inflation indicator up 2.4%, year-on-year, with the core PCE rate up 2.8%. Those numbers were slightly cooler than expected. It’s been said the Federal Reserve officials pay extra close attention to the PCE inflation numbers.
Asian and European stock indexes were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins but up from overnight multi-week lows after rebounding a bit on the PCE numbers.
Risk aversion is keener to end the trading week. The Republican-led U.S. House of Representatives rejected a temporary government funding plan backed by President-elect Donald Trump. That raises the risk of a U.S. government shutdown tonight. Republicans will regroup and come up with another solution, said House Speaker Mike Johnson.
In other news, Trump threatened the European Union with tariffs if its member countries don’t buy more U.S. oil and natural gas. The Euro currency strengthened against the U.S. dollar in a sign traders believe the EU will be able to meet Trump’s demands.
Today is the quarterly “triple-witching” expirations that will see $6.5 trillion worth of options on individual stocks, stock indexes and exchange-traded funds expire. Today’s expirations are this year’s largest and among the biggest on record, according to a derivatives analytical firm.
The sell off in Bitcoin has picked up steam late this week as investors pulled out of ETFs that invest in Bitcoin
The key outside markets today see the U.S. dollar index lower on a corrective pullback from this week’s strong gains. Nymex crude oil futures prices are modestly down and trading around $69.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.5%--this week hitting the highest yield since May.
Technically, February gold futures bulls have lost their slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. First resistance is seen at the Thursday’s high of $2,640.90 and then at $2,650.00. First support is seen at $2,600.00 and then at this week’s low of $2,596.70. Wyckoff's Market Rating: 5.0.
March silver futures bears have the overall near-term technical advantage. A two-month-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at the August low of $27.39. First resistance is seen at $30.00 and then at $30.50. Next support is seen at this week’s low of $29.145 and then at $29.00. Wyckoff's Market Rating: 3.5.
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