Gold prices are lower and silver prices slightly down in early U.S. trading Thursday. Traders and investors are awaiting another key U.S. inflation report due out shortly. December gold was last down $24.30 at $3,657.90. December silver prices were down $0.065 at $41.535.
This morning comes the U.S. consumer price index report for August. Analysts expect the August CPI report to show a 2.9% rise, year-on-year. The core CPI (excluding food and energy) is seen coming in at up 3.1% annually. The CPI data comes after a surprisingly tame producer price index report on Wednesday. PPI saw its first decline in four months. On the year, PPI rose 2.6% in August, below the 3.1% rise in the July report and forecasts of up 3.3%. Wednesday’s PPI data fell squarely into the camp of the U.S. monetary policy doves, who want to see more aggressive U.S. interest rate cuts. The Fed’s FOMC meets next week and is expected to cut the Fed funds rate range by 0.25%.
Global stocks were mixed to firmer overnight. U.S. stock indexes are pointed to firmer openings when the New York day session begins.
World crude oil demand is forecast to increase by 740,000 barrels per day (bpd) year-on-year, in 2025, up marginally from last month’s IEA report, “with resilient deliveries in advanced economies contrasting with relatively muted consumption in emerging economies.” Global oil supply inched up in August to a record 106.9 million bpd as OPEC+ continued unwinding output cuts and non-OPEC+ supply hovered near all-time highs. World oil production is now projected to rise by 2.7 million bpd, to 105.8 million bpd this year and 2.1 million bpd, to 107.9 million bpd next year, of which non-OPEC+ countries account for 1.4 million bpd and just over 1 million bpd, respectively, said the IEA. “Oil markets are being pulled in different directions by a range of forces, with the potential for supply losses stemming from new sanctions on Russia and Iran coming against a backdrop of higher OPEC+ supply and the prospect of increasingly bloated oil balances,” said the IEA in its September report.
Germany’s export sector remains “mired in crisis due to a combination of slumping demand, rising costs and escalating protectionism,” according to a lobby group and reported by Bloomberg. Exports from Europe’s biggest economy are expected to contract by 2.5% this year, roughly in line with a January forecast but still “an alarming picture,” the BGA industry association said today. “German exporters are battling on many fronts,” BGA President Dirk Jandura said in an emailed statement. “Global trade risks persist, driven by rising barriers to commerce, geopolitical tensions and a slowing world economy.” Germany’s economy has broadly stagnated since Russia’s invasion of Ukraine in 2022 and U.S. trade tariffs.
The key outside markets today see the U.S. dollar index firmer, while crude oil futures are weaker and trading around $63.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.06%.
Other U.S. economic data due for release Wednesday includes the weekly jobless claims report, real earnings and the monthly Treasury budget statement.
Technically, December gold futures bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,750.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $3,550.00. First resistance is seen at the overnight high of $3,687.50 and then at $3,700.00. First support is seen at Wednesday’s low of $3,651.40 and then at this week’s low of $3,621.70. Wyckoff’s Market Rating: 8.5.
December silver futures bulls have the solid overall near-term technical advantage. A bull flag or pennant pattern has formed on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $45.00. The next downside price objective for the bears is closing prices below solid support at $38.00. First resistance is seen at this week’s high of $42.355 and then at $43.00. Next support is seen at this week’s low of $41.08 and then at last week’s low of $40.555.
Source: Jim Wyckoff Kitco
