(Kitco News) - Gold and silver prices are firmer in early U.S. trading Tuesday. Both metals got a mild boost following a U.S. inflation report that came in cooler than expected. February gold was last up $5.50 at $2,683.90. March silver was up $0.131 at $30.44.
Today’s U.S. data point is the producer price index report for December. PPI came in cooler than expected at up 0.2%, month-on month, versus expectations of up 0.4%. The core PPI (excluding food and energy) was also cooler than forecast, at unchanged, month-on-month, versus expectations for up 0.3%.
The U.S. data point of the week is the consumer price index for December, due out Wednesday. CPI is seen coming in at up 2.9%, year-on-year, versus up 2.7% in the November report. The core CPI is seen rising 0.2% after four straight months of 0.3% increases, according to a Bloomberg survey. The core CPI is forecast to have risen 3.3%, year-on-year, unchanged from readings from the previous three months. “The bond market mini-meltdown and inflation concerns have magnified the focus on tomorrow’s CPI report. Another upside surprise would further cement doubts that the Fed will be cutting rates anytime soon,” said Deutsche Bank strategist Jim Reid in a Bloomberg email dispatch.
Asian and European markets were mixed to firmer overnight. U.S. stock indexes are set to open up when the New York day session begins and were boosted by the tamer PPI data. The U.S. stock index bulls have faded the past couple weeks and price downtrends are in place on the daily charts.
In other news, Japan’s 40-year government bond yield reached its highest since its inception in 2007 amid a global bond sell off and expectations that the Bank of Japan will raise interest rates in coming months.
Reports say the Trump administration is discussing slowly ramping up trade tariffs and a gradual approach aimed at boosting negotiating leverage while hoping to avoid a rise in inflation.
The key outside markets today see the U.S. dollar index weaker on a corrective pullback after hitting a two-plus year high Monday. Nymex crude oil futures prices are weaker after hitting a six-month high Monday and are trading around $76.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.774%. Traders and investors are becoming increasingly concerned that Trump’s tax and trade agenda will fuel price inflation.
Other U.S. economic data due for release Tuesday includes the Johnson Redbook weekly retail sales report, the NFIB small business index, and the RCM/TIPP economic optimism index.
Technically, February gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the December high of $2,761.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the December low of $2,596.70. First resistance is seen at $2,700.00 and then at Monday’s high of $2,723.80. First support is seen at Monday’s low of $2,675.20 and then at $2,660.00. Wyckoff's Market Rating: 6.5.
March silver futures bulls and bears are on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $31.84. The next downside price objective for the bears is closing prices below solid support at the December low of $29.145. First resistance is seen at $30.75 and then at $31.00. Next support is seen at the overnight low of $30.115 and then at $30.00. Wyckoff's Market Rating: 5.0
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