Gold prices are slightly up in choppy, two-sided action in early U.S. trading Wednesday, following a cool U.S. consumer price inflation report. Some mild profit-taking is featured from the futures traders, on a “buy the rumor, sell the fact” scenario after this week’s tame U.S. inflation numbers were expected by traders. December gold was last up $2.60 at $2,510.30. September silver was up $0.134 at $27.91.
The U.S. data point of the day Wednesday saw the consumer price index for July come in at up 0.2% from June and up 2.9%, year-on-year. The core rate was up 0.2% from June and up 3.2%, year-on-year. Those numbers were in line to slightly lower than market expectations. Tuesday’s July producer price index came in at up 0.1%. Excluding food and energy, the “core” PPI was unchanged from June versus. This week’s tame inflation numbers fall into the camp of the U.S. monetary policy doves, who want to see the Federal Reserve cut U.S. interest rates sooner rather than later. The marketplace is presently pricing in a 0.5% rate cut from the Fed at its September FOMC meeting.
The retail sales report on Thursday will also be closely scrutinized by the marketplace.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The gold market this week has seen some modest safe-have demand that has driven the yellow metal to near its record highs. The marketplace is expecting tensions in the Middle East to rise, as Iran and/or its proxies are expected to retaliate militarily against Israel after Israel assassinated Hezbollah and Hamas officials a couple weeks ago.
The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are slightly up and are trading around $78.50 a barrel. The benchmark 10-year U.S. Treasury note is presently fetching 3.847%.
Other U.S. economic data due out Wednesday includes the weekly MBA mortgage applications survey, real earnings and the weekly DOE liquid energy stocks report.
Technically, December gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,400.00. First resistance is seen at the overnight high of $2,519.70 and then at $2,524.00. First support is seen at the overnight low of $2,494.50 and then at $2,475.00. Wyckoff’s Market Rating: 7.5.
September silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the August high of $29.355. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at the overnight high of $28.175 and then at $28.50. Next support is seen at this week’s low of $27.28 and then at $27.00. Wyckoff’s Market Rating: 4.0
Source: Jim Wyckoff Kitco
