Gold Prices Firmer Following Tame U.S. Inflation Report

(Kitco News) – Gold prices are moderately higher in early U.S. trading Friday and saw little price reaction to a non-problematic U.S. consumer price index report. The precious metals are getting some daily support from a weaker U.S. dollar inex today. February gold futures were last up $5.70 an ounce at $1,293.00. March Comex silver was up $0.087 at $15.73 an ounce.

The U.S. economic data point of the day Friday is the consumer price index for December, which came in right in line with expectations, at down 0.1% from November and up 1.9%, year-on-year. Recent inflation data from around the globe points to a tamer outlook on rising prices in the coming months. That should allow world central banks to be less hawkish on their monetary policies, which would be a bullish element for the precious metals markets.

European stock markets were mixed overnight, while Asian stocks were slightly up, in quieter trading and on some normal consolidation from recent gains in most stock indexes. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

The generally upbeat trader and investor attitudes this week are due to optimism the U.S. and China—the world’s two largest economies—are moving closer to a resolution of their trade war. Perceptions of a more dovish U.S. Federal Reserve monetary policy in 2019 are also boosting marketplace sentiment. And a big price rebound in the crude oil market the past couple weeks is also a positive for stock, financial and commodity markets.

There is no other U.S. economic data due for release today, due to the continued U.S. government partial closure that is impacting government reports.

The important outside markets today see the U.S. dollar index slightly lower. The index remains in a near-term price downtrend. Meantime, Nymex crude oil prices are slightly lower and trading just above $52.00 a barrel.

Technically, the gold bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at this week’s high of $1,298.00 and then at the January high of $1,300.40. First support is seen at this week’s low of $1,280.20 and then at the January low of $1,278.10. Wyckoff’s Market Rating: 6.5

March silver futures bulls have the overall near-term technical advantage. A seven-week-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at this week’s high of $15.88 and then at last week’s high of $15.955. Next support is seen at this week’s low of $15.56 and then at $15.385. Wyckoff’s Market Rating: 6.0.

By Jim Wyckoff
For Kitco News


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