(Kitco News) - Gold and silver prices are higher in early U.S. trading Friday, just ahead of one of the major the U.S. economic data points of the month: the consumer price index. April gold was last up $43.20 at $4,992.60. March silver prices were up $1.688 at $77.35.
U.S. consumer price index on deck this morning. This morning comes one of the most important U.S. inflation gauges: the consumer price index. Analysts are expecting a January CPI number of up 2.5%, year-on-year, with the “core” reading (minus food and energy) also seen up 2.5%, annually. The December CPI annual reading was up 2.5%, while the December core annual reading was up 2.6%. On Thursday there was a rumor swirling about the marketplace that the CPI print had been leaked early and that it was a “hot” number, inflation-wise. That rumor appears to be unfounded.
Analysts attempt to explain Thursday morning “flash crashes” in metals, U.S. stock indexes. Gold, silver, copper, platinum and palladium futures markets late Thursday morning plunged as concerns about artificial intelligence spurred a sell off across many markets, with algorithmic traders appearing to amplify the precious metal’s sudden drop. “Stock indexes also tumbled as investors bet that artificial intelligence would dent some companies’ future earnings, triggering a rout across risk assets. The dramatic decline in gold — which didn’t have a clear catalyst — was likely intensified by selling from commodity trading advisers using computer models to bet on price moves,” said a Bloomberg report. Margin calls also likely added to the sell off, with some investors forced to exit positions in commodities including metals to provide liquidity, said Nicky Shiels, head of metals strategy at MKS PAMP SA. “We are all clueless. It all happened so quickly and feels like a ‘risk-out’ move,” Shiels said. In times of extreme market stress, haven assets like gold will also be sold by investors in dire need of liquidity, she added and as reported by Bloomberg.
White House looking to roll back metals tariffs. The Trump administration is working to narrow its broad tariffs on steel and aluminum products that companies find difficult to calculate and the European Union wants reined in as part of its pending trade deal with the U.S., a person familiar with the matter said and as reported by Bloomberg. The U.S. Trade Representative’s Office is scrambling to resolve complications spawned last year by the Commerce Department’s efforts to rush out President Trump’s tariff agenda, the person said. The White House has communicated to companies that adjustments are in the works, but details and timing remain unclear, the person said. The rollback plans were reported earlier by the Financial Times. Aluminum fell in London following the report.
Trump says U.S.-Iran talks could last for as long as a month. President Trump on Thursday said that he could see negotiations with Iran stretching for as long as a month, as he seeks a diplomatic agreement that would roll back Tehran’s nuclear ambitions. “I guess over the next month, something like that,” Trump told reporters Thursday when asked how long the talks would take. “Shouldn’t take — I mean, should happen quickly. They should agree very quickly,” Bloomberg reported. The president said it would be “very traumatic” for Iran if it failed to reach an agreement. Meantime, the U.S. will send the world’s largest aircraft carrier to the Middle East to back up another one that’s already there, a person familiar with the plans said Friday and as reported by the Associated Press, putting more American firepower behind Trump’s efforts to coerce Iran into a deal over its nuclear program.
The key outside markets today see the U.S. dollar modestly up, with crude oil prices a bit weaker and trading around $62.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.12 percent.
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, April gold futures bulls’ next upside price objective is to produce a close above solid resistance at $5,250.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at last week’s low of $4,670.00. First resistance is seen at the overnight high of $5,016.40 and then at $5,100.00. First support is seen at Thursday’s low of $4,900.00 and then at $4,800.00. Wyckoff's Market Rating: 6.5.
March silver futures bulls see the next upside price objective is closing prices above solid technical resistance at last week’s high of $92.015. The next downside price objective for the bears is closing prices below solid support at the February low of $63.90. First resistance is seen at $80.00 and then at $82.50. Next support is seen at the overnight low of $73.745 and then at $71.20. Wyckoff's Market Rating: 5.0.
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