Gold, Silver Prices Up Following Tame U.S. CPI

(Kitco News) – Gold and silver futures prices are modestly up in early U.S. trading Wednesday. There are several factors at work supporting the two precious metals markets this week. Some mild safe-haven demand has surfaced this week, amid Brexit turmoil and on some upbeat news regarding U.S.-China trade talks. The technical chart postures for gold and silver have also turned more bullish recently. February gold futures were last up $3.70 an ounce at $1,250.80. March Comex silver was up $0.157 at $14.785 an ounce.

The just-released U.S. economic data point of the week, the consumer price index for November, came out at unchanged from October, which was right in line with market expectations. Recent U.S. inflation reports have shown very tame inflation, after data released earlier this year raised some concern regarding rising inflation becoming problematic. The metals markets did not react to the report.

World stock markets were mostly higher overnight as global traders and investors chose to focus on improving prospects for a U.S.-China trade deal, instead of the uncertainty of leadership of the United Kingdom. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trading in the U.S. stock indexes has been volatile this week, with many stock market experts saying to expect this to be the norm for at least a while.

The present U.S.-China trade negotiations are so far producing tangible results, according to reports coming from both nations. Officials from both sides appear to be upbeat on the progress. The marketplace reckons that if the world’s two largest economies come to terms on trade, the spillover effect would be positive for most world economies. Also, the precious metals are supported on the upbeat trade negotiation reports on ideas of better worldwide demand for the metals due to improved economic conditions if a trade deal is reached.

Brexit turmoil has been kicked up a notch at mid-week, as U.K. Prime Minister Theresa May will face a no-confidence vote from members of Parliament today. May on Monday called off a vote on her Brexit plan, which most reckoned would be defeated anyway. She has quickly lost popularity in the U.K. public eye and among members of Parliament. However, most global markets are not being significantly impacted by the political turmoil in the U.K.

The key outside markets early today find the U.S. dollar index slightly lower on a corrective pullback from recent solid gains that pushed the index to a new for-the-move high Tuesday. Meantime, Nymex crude oil prices are higher on a corrective bounce. There are still no early technical clues the crude oil market is close to a bottom.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, real earnings, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report.

Technically, gold bulls have the overall near-term technical advantage. Prices are in a four-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 the July high of $1,284.10. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,225.00. First resistance is seen at Monday’s high of $1,256.60 and then at $1,260.00. First support is seen at this week’s low of $1,245.80 and then at $1,240.00. Wyckoff’s Market Rating: 6.0

March silver futures bears still have the overall near-term technical advantage. However, a choppy three-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 the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at this week’s high of $14.82 and then at $15.00. Next support is seen at this week’s low of $14.565 and then at last week’s low of $14.28. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff
For Kitco News


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