(Kitco News) - Gold and silver prices are lower in midday U.S. trading Thursday, following a key U.S. inflation report that came in surpisingly hotter than expected. December gold was last down $20.70 at $3,388.00. September silver prices were down $0.552 at $38.04.
U.S. Producer Price Inflation (PPI) rose 0.9% month-over-month in July. That is up from a flat reading in June. It was well above expectations of 0.2% and was the biggest increase in producer prices since June 2022. The report falls into the camp of the U.S. monetary policy hawks, who do not want to see the Federal Reserve lower interest rates any time soon. Year-on-year, headline producer inflation accelerated to a five-month high of 3.3% and above expectations of 2.5%. Core PPI, which excludes food and energy, also went up 0.9%, above forecasts of 0.2%. On the year, Core PPI is up 3.7% from 2.6% previously. The hotter-than-expected producer price index report for July only slightly lowered high marketplace odds for a September Fed rate cut of 25 basis points. However, the hotter PPI probably takes off the table a 50 basis-point Fed rate cut in September that a minority of the marketplace was thinking before the PPI data.
The key outside markets today see the U.S. dollar index higher after the PPI report, with crude oil prices up and trading around $63.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.2%.
Technically, December gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,500.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the July low of $3,319.20. First resistance is seen at the overnight high of $3,423.80 and then at $3,450.00. First support is seen at this week’s low of $3,379.10 and then at $3,350.00. Wyckoff's Market Rating: 7.0.
September silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the July high of $39.91. The next downside price objective for the bears is closing prices below solid support at the July low of $36.28. First resistance is seen at last week’s high of $38.875 and then at $39.00. Next support is seen at this week’s low of $37.515 and then at $37.00. Wyckoff's Market Rating: 7.0.
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