Gold, Silver Prices Up; Tame U.S. Inflation Data Supportive

(Kitco News) – Gold and silver prices are moderately up in early U.S. trading Tuesday, on some short covering by the shorter-term futures traders and perceived bargain hunting following recent pressure. Another mild U.S. inflation report is also friendly for the precious metals markets. Bulls have regained some technical strength early this week. April gold futures were last up $6.90 an ounce at $1,298.00. May Comex silver was last up $0.166 at $15.435 an ounce.

The key U.S. economic data point early this week is today’s just-released consumer price index report for February, which came in at up 0.2% from January and was in line with market expectations. On an annual basis, CPI was up 1.5%–the lowest reading in 2.5 years. This continues a theme of low and non-problematic inflation in the major world economies, which is allowing the central banks to keep interest rates low. The gold and silver markets up-ticked just a bit following the report, which favors the monetary policy doves.

Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward steady to narrowly mixed openings when the New York day session begins.

There is not much trader and investor anxiety in the world marketplace at present, which is bullish for world stock markets.

Reports say U.S. Trade Representative Robert Lightizer and Treasury Secretary Steven Mnuchin on Monday held talks with Chinese Vice Premier Liu He regarding key elements of the proposed U.S.-China trade agreement, according to China’s Xinhua News Agency. Marketplace attitudes are upbeat early this week on a trade deal getting done soon.

British lawmakers vote today on another Brexit plan offered by Prime Minister Theresa May. Despite some last-minute concessions from the European Union, the U.K. Parliament is expected to vote down May’s plan.

The outside markets today see the U.S. dollar index slightly lower on a corrective pullback from recent gains that put the index at a new high for the year last week. Nymex crude oil prices are firmer and trading around below $57.50 a barrel.

U.S. economic reports due for release Tuesday include the weekly Johnson Redbook and Goldman Sachs retail sales reports, and the consumer price index.

Technically, the April gold bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $1,320.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,275.00. First resistance is seen at last week’s high of $1,301.30 and then at $1,310.00. First support is seen at this week’s low of $1,290.60 and then at last Friday’s low of $1,285.60. Wyckoff’s Market Rating: 6.0

May silver futures bulls have regained the slight overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at last week’s low of $14.985. First resistance is seen at $15.50 and then at $15.545. Next support is seen at the overnight low of $15.31 and then at this week’s low of $15.225. Wyckoff’s Market Rating: 5.5.

By Jim Wyckoff
For Kitco News


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