(Kitco News) - Gold prices are firmer and not far below Tuesday’s contract/record highs in early U.S. trading Wednesday. Traders and investors await a key U.S. inflation report this morning. December gold was last up $10.10 at $3,692.00. December silver prices were up $0.284 at $41.625.
Today comes the U.S. producer price index report for August, which is expected to come in at up 0.3%, month-on-month. The July report showed a 0.9% rise. The core PPI (excluding food and energy) is also expected to come in up 0.3%, month-on-month, and compares to a 0.9% rise in core PPI in the July report. The consumer price index report for August is out Thursday morning.
U.S. stock indexes are pointed toward firmer openings today in New York. Global stock indexes were mixed overnight.
In overnight news, geopolitics is heating up again and that’s bullish for safe-haven gold and silver markets. Poland shot down Russian drones that crossed into its territory during Russia’s latest massive air strike on Ukraine. Poland called it an “act of aggression.” Polish Prime Minister Donald Tusk said the airspace violation in the early hours of Wednesday amounted to an intentional provocation from Moscow, forcing the NATO and European Union member state to close its airspace and order citizens in the eastern part of the country to stay indoors. Poland will seek to trigger North Atlantic Treaty Organization consultations on a potential response, a procedure known as Article 4, the premier said. Polish authorities registered 19 airspace violations, with a “significant” number of drones originating from Belarusian territory, Tusk said.
Meantime, Israel's airstrike on Qatar's capital delivered a major blow to U.S.-supported efforts to normalize ties with Gulf Arab nations and possibly crippled talks for a ceasefire in Gaza. The attack targeted leaders of Palestinian militant group Hamas and was condemned by Qatar's Gulf neighbors, including the United Arab Emirates and Saudi Arabia. The strike may have ended Qatar's role as a mediator in ceasefire negotiations, with other countries such as Turkey potentially being put on high alert. The Israel strike inside Qatar took the U.S. by surprise. President Trump said about the matter: “I will tell you this, I was very unhappy about it,” he told reporters Tuesday night, adding that he expected to make additional comments today. “Very unhappy about every aspect — we got to get the hostages back, but I was very unhappy about the way that went down,” said Trump.
In other news, U.S. Treasury Secretary Scott Bessent called on the Federal Reserve to change its monetary policy stance after a government agency revised U.S. jobs data to show weaker hiring in the year through March. “They should, let’s see if they will,” Bessent said on Fox Business Tuesday, and as reported by Bloomberg, when asked if the Fed should recalibrate. He cited famed economist John Maynard Keynes for saying “when the facts change, I change my mind — what do you do?” Bessent’s comments came after the revised jobs data on Tuesday morning showed there were 911,000 fewer payroll gains in the 12 months through March. “It turns out that we didn’t have good facts.” In a posting on X Tuesday, the Treasury chief said, “President Trump inherited a far worse economy than reported, and he’s right to say the Fed is choking off growth with high rates.”
U.S. Energy Information Administration says crude oil glut is here… A global crude oil glut is already underway, with inventories expected to rise in the current quarter, according to a U.S. Energy Information Administration report. Global oil inventories are set to grow by an average of more than 2 million barrels per day in the current quarter through the first quarter of next year. The anticipated influx of crude into the global market will depress oil prices in early 2026, potentially leading to a reduction in supply by both OPEC-plus and some non-OPEC producers later in the year, said the EIA. However, the agency still projects U.S. crude oil production will decline in 2026--the first annual drop in production since 2021.
The key outside markets today see the U.S. dollar index near steady, while crude oil futures are higher and trading around $63.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.08%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.
Technically, December gold futures bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,550.00. First resistance is seen at this week’s high of $3,715.20 and then at $3,750.00. First support is seen at the overnight low of $3,651.40 and then at this week’s low of $3,621.70. Wyckoff's Market Rating: 9.0.
December silver futures bulls have the solid overall near-term technical advantage. A bull flag pattern has formed on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $45.00. The next downside price objective for the bears is closing prices below solid support at $38.00. First resistance is seen at this week’s high of $42.355 and then at $43.00. Next support is seen at this week’s low of $41.08 and then at last week’s low of $40.555. Wyckoff's Market Rating: 8.5.
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