Gold prices are modestly higher in early U.S. trading Tuesday, following a cool U.S. producer price inflation report. Silver prices are slightly lower. December gold was last up $6.40 at $2,510.00. September silver was down $0.108 at $27.90.
The U.S. data points of the week started Tuesday with the July producer price index, which came in at up 0.1%. July PPI was seen coming up 0.2% from June. Excluding food and energy, the “core” PPI was unchanged from June versus expectations for a rise of 0.2%. These tame 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.
Wednesday morning’s consumer price index for July is seen up 0.2%, month-on-month. The retail sales report on Thursday will also be closely scrutinized by the marketplace.
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins and rallied following the tame U.S. PPI report.
Some risk aversion has crept back into the marketplace this week as the U.S. government has again warned that an Iranian and/or Iranian proxy group attack on Israel is likely imminent and could come as soon as this week. Also, the Ukrainian military has apparently established a foothold inside Russian territory. This is presently driving some mild safe-haven demand into the gold market.
In overnight news, the closely watched German ZEW economic expectations index nosedived, with an August reading of 19.2 versus 41.8 in the July report.
The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil prices are slightly down and are trading around $79.75 a barrel. Oil prices are seeing a boost from the heightened miliary tensions in the Middle East. Reads a DowJones Newswires headline today:
“China’s oil-demand growth slowdown weighs on global outlook, IEA says.” The benchmark 10-year U.S. Treasury note is presently fetching 3.911%.
Other U.S. economic data due out Tuesday includes the weekly Johnson Redbook retail sales report and the NFIB small business optimism index.
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 $2,350.00. First resistance is seen at the overnight high of $2,517.30 and then at $2,524.00. First support is seen at the overnight low of $2,498.20 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 $28.135 and then at $28.50. Next support is seen at Monday’s low of $27.28 and then at $27.00. Wyckoff’s Market Rating: 4.0.
Source: Jim Wyckoff Kitco
