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London
March 2, 2024
PI Global Investments
Precious Metals

Gold, silver tread water ahead of key U.S. inflation data


(Kitco News) – Gold and silver prices are not trading too far from unchanged levels on the day in midday dealings Wednesday. Traders are awaiting the U.S. data points of the week: the December consumer price index report on Thursday and the December producer price index report on Friday. The CPI report is seen up 3.3%, year-on-year versus a rise of 3.1% in the November report. February gold was last down $1.80 at $2,031.00 and March silver was last down $0.056 at $23.04.

The Federal Reserve has been pleased with cooling U.S. inflation—to the point of hinting of no more interest rate increases and possibly interest rate cuts in 2024. The Fed would like to see annual U.S. inflation rates of around 2%.

Most of the marketplace expects the CPI and PPI numbers late this week to be tame on inflation. If the numbers are printed as expected look for the stock, financial and commodity markets to view that as friendly, as traders would reckon that would allow the Fed to ease its monetary policy sooner—meaning better demand for goods and services, and better consumer confidence. It’s my bias, too, that this week’s U.S. inflation numbers will not contain markets-moving surprises. There is presently an outlier group of markets watchers that believes deflationary price pressures could come into play later this year.

Importantly, inflation reports in the coming few months may be more worrisome for the marketplace and for central bankers. The heightened Middle East tensions include Iranian-backed Houthi attacks on shipping vessels in the Red Sea. The Red Sea is one of the world’s major shipping routes. Some shippers have opted to avoid the Red Sea altogether and instead traverse the much longer route all the way around the African continent. Of course, that means longer supply chain delivery times and higher shipping costs. Reads a Dow Jones Newswires headline today: “Importers face surging shipping costs, delays as Red Sea diversions pile up.”

The shipping delays and higher costs could push up producer price inflation in the coming months, and in turn raise costs to the consumer. You can bet the world’s central bankers are watching this situation closely.

Asian and European stock markets were mixed overnight. U.S. stock index futures are slightly up near midday.

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil prices are slightly down and trading around $72.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.019%.

Technically, February gold futures bulls have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,100.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at today’s high of $2,046.20 and then at this week’s high of $2,053.30. First support is seen at this week’s low of $2,022.70 and then at $2,015.00. Wyckoff’s Market Rating: 6.5.

March silver futures bears have the overall near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at the November low of $22.26. First resistance is seen at this week’s high of $23.565 and then at $23.715. Next support is seen at last week’s low of $22.88 and then at the December low of $22.785. Wyckoff’s Market Rating: 4.0.

March N.Y. copper closed down 30 points at 375.55 cents today. Prices closed near the session low today and hit a three-week low. Prices also scored a bearish “outside day” down on the daily bar chart. The copper bears have the slight overall near-term technical advantage. A choppy, 2.5-month-old uptrend on the daily bar chart has been negated. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the December high of 397.40 cents. The next downside price objective for the bears is closing prices below solid technical support at 365.00 cents. First resistance is seen at today’s high of 379.30 cents and then at this week’s high of 384.05 cents. First support is seen at the December low of 372.90 cents and then at 370.00 cents. Wyckoff’s Market Rating: 4.5.

Try out my “Markets Front Burner” email report. My next one is due out today and is going to be entitled, “When China sneezes…” Front Burner is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. And it’s free! Sign up to my new, free weekly Markets Front Burner newsletter, at https://www.kitco.com/services/markets-front-burner.html .

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.



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