(Kitco News) - Gold prices erased overnight losses and hit a two-month high following a much-tamer-than-expected U.S. inflation report today. Silver prices are lower, but up from earlier sharp losses, on some routine profit taking from the shorter-term futures traders following recent gains that prices to a record high Wednesday. February gold was last up $28.20 at $4,400.00. March silver prices were down $0.641 at $66.25.
The U.S. consumer price index came in at up 2.7%, year-on-year, in December 2025--the lowest since July and below the forecast for a 3.1% rise and the 3.0% gain reported for September. Meanwhile, annual core inflation (minus food and energy) came in at up 2.6%, the lowest since March 2021 and compares to forecasts of up 3.0%. The Bureau of Labor Statistics did not collect data for October 2025 due to U.S. government shutdown. As a result, October figures were missing and November monthly data were not released. However, the BLS said that the CPI increased 0.2% over the 2 months from September to November. Today’s CPI report falls squarely into the camp of the U.S. monetary policy doves, who want more interest rate cuts from the Federal Reserve. That would also be bullish for the precious metals and bearish for the U.S. dollar.
The key outside markets today see the U.S. dollar index slightly lower. Crude oil prices are firmer and trading around $56.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.116% and dipped after the tame U.S. CPI data.
Note: The gold market operates through two primary pricing mechanisms. The first is the spot market, which quotes prices for on-the-spot purchase and immediate delivery. The second is the futures market, which sets prices for delivery at a future date. Due to year-end positioning market liquidity, the December gold futures contract is currently the most actively traded on the CME.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at the contract/record high of $4,433.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,200.00. First resistance is seen at $4,433.00 and then at $4,450.00. First support is seen at today’s low of $4,338.00 and then at this week’s low of $4,297.40. Wyckoff's Market Rating: 9.0.
March silver futures bulls’ next upside price objective is closing prices above solid technical resistance at $70.00. The next downside price objective for the bears is closing prices below solid support at $60.00. First resistance is seen at the record high of $67.18 and then at $67.50. Next support is seen at today’s low of $66.825 and then at $66.00. Wyckoff's Market Rating: 9.0.
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