(Kitco News) - Gold and silver prices are lower in early U.S. trading Wednesday, on some profit-taking pressure from the shorter-term futures traders, just ahead of a key U.S. inflation report. April gold was last down $53.10 at $5,188.80. May silver prices were down $2.857 at $86.70.
U.S. consumer price index out this morning. The annual inflation rate in the U.S. likely held steady at 2.4% in February, unchanged from January and remaining at its lowest level since May of 2025. On a monthly basis, the CPI is estimated to have risen by 0.3%, slightly accelerating from up 0.2% in January. Gasoline prices probably picked up while prices for services, food, and housing are expected to have slowed, and used vehicle prices likely remained lower. Meanwhile, annual core inflation, which excludes food and energy, is projected to have remained unchanged at 2.5%, the same as in January and near its lowest level since 2021. On a monthly basis, core CPI is expected to have increased by 0.2%, less than 0.3% in the previous month.
Latest on the war in Iran.
--The IEA said to propose releasing record 300-400 million barrels from reserves
--Market volatility follows a day of mixed messages from U.S. officials
--Three ships were hit in Middle East; drones fell near Dubai airport
-- Tuesday night was rough in Tel Aviv, with four volleys of Iranian missiles fired
--In Bahrain, sirens are sounding in the country
--Iran also staged more strikes against the United Arab Emirates
--U.S. and Israel continuing to hit targets in Iran
-- Trump warns Iran against laying mines in Strait of Hormuz
-- The U.S. said no oil tanker has been escorted by its navy through Strait of Hormuz, refuting earlier social media post by Energy Secretary Chris Wright.
--Bloomberg headline: “War in Iran is creating a fertilizer crisis like never before”
The International Energy Agency is proposing a release of emergency crude oil reserves that would be the largest-ever in its history, with a decision possible later today, according to a person familiar with the matter and as reported by Bloomberg. The IEA has proposed a release in the range of about 300 million to 400 million barrels, the person said, as governments seek to contain a spike in energy prices driven by the Middle East war. The move under consideration would exceed the 182 million barrels that IEA members put into the market in 2022 after Russia invaded Ukraine. The IEA has said its 32 members hold more than 1.2 billion barrels in emergency stockpiles, including the largest buffer, the U.S. Strategic Petroleum Reserve.
Trump says new U.S. oil refinery to be built. President Trump on Tuesday announced the construction of a refinery on the southern U.S. border backed by India's Reliance Industries, operator of the world's biggest refining complex. Trump made the announcement amid rising U.S. gasoline prices since the start of the U.S.-Israeli war with Iran. "For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil," said America First's chairman and founder, John V. Calce and as reported by Reuters. Many U.S. Gulf Coast refineries are unable to process light, sweet crude oil from fracking shale fields because they were configured in the last 40 years to run lower-cost heavy, sour crude, which has higher density and contains more sulfur. India’s Reliance has signed "a binding 20-year offtake term sheet" with America First, meaning it will buy products the refinery produces. That will help cut India's trade surplus with the U.S., which has been a Trump grievance, said the report.
Euro currency slides to three-month low. The Euro currency today gave up early gains to drop below the $1.16 mark, hitting its weakest level since late November, as lingering uncertainty over the Middle East conflict and concerns about rising inflation across the Eurozone weighed on the currency. Market expectations have shifted toward a more hawkish stance for the European Central Bank. Markets are increasingly pricing in at least one 25-basis-point rate hike this year, with some traders now considering the possibility of two increases. On Tuesday, ECB head Christine Lagarde reiterated that the ECB is committed to taking all necessary measures to keep inflation under control, despite the current surge in energy prices.
There is a reckoning occurring in the private credit market: Pimco. Christian Stracke, the head of Pimco, says there is a reckoning going on in the private credit market due to years of sloppy underwriting standards in lending, calling it a crisis of really bad underwriting. “The $1.8 trillion private credit market is witnessing an exodus of investors after high-profile corporate blowups led to concerns over loan quality and exposure to software firms,” said a Bloomberg report. Stracke says the squeeze will likely result in mid-single-digit defaults for a couple of years and investor returns dropping to as low as 6% from around 10%, but he doesn't foresee a broader credit crisis. Cliffwater LLC just became the latest to come under pressure, with its $33 billion flagship private credit fund facing redemption requests. Meanwhile, the Financial Times reported that JPMorgan Chase & Co. has told private credit lenders that it marked down the value of some loans.
The key outside markets today see the U.S. dollar index modestly higher, with Nymex crude oil prices up and trading around $85.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.16 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 last week’s high of $5,434.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $5,000.00. First resistance is seen at this week’s high of $5,248.70 and then at $5,300.00. First support is seen at Tuesday’s low of $5,127.10 and then at $5,100.00. Wyckoff's Market Rating: 7.0.
May silver futures futures bulls see their next upside price objective is closing prices above solid technical resistance at $95.86. The next downside price objective for the bears is closing prices below solid support at the February low of $71.815. First resistance is seen at this week’s high of $90.385 and then at $92.50. Next support is seen at $86.00 and then at $85.00. Wyckoff's Market Rating: 6.0.
(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Sign up here; it’s real easy. https://www.kitco.com/services.)
