(Kitco News) – Gold and silver prices fell in early U.S. trading on Wednesday, selling off after a better-than-expected U.S. inflation report. June gold was last down $14.50 to $2,347.00. May silver was last down $0.049 to $27.93.
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The just-released US consumer price index for March rose 3.5% compared to the same month last year, and core interest rates rose 3.8%. The market expected March’s CPI to rise 3.4% year-on-year. Core CPI, which excludes food and energy, rose 3.7% annually. Today’s CPI data favors US monetary policy hawks. “This really puts into question whether the Fed will be able to cut rates in June,” the Bloomberg radio host said.
The minutes of the previous FOMC meeting will be released this afternoon. The March US producer price index and the European Central Bank’s monetary policy meeting are scheduled for Thursday.
Asian and European stock indexes were mixed overnight. US stock indexes were expected to open lower in New York trading, selling off on the rise in CPI.
Tonight’s Dow Jones News headline said, “Commodity gains reflect improving economic conditions, but also pose inflation risks.”
In today’s major external markets, the US dollar index rose on the CPI report and is seen as rebounding. Nymex crude oil prices are up slightly, trading around $85.75 per barrel. The yield on the benchmark 10-year U.S. Treasury note currently stands at 4.5% and is trending upward.
Other U.S. economic indicators released Wednesday include the MBA Mortgage Application Survey, Real Earnings, Monthly Wholesale Trade, Monthly Treasury Budget Statement, and Weekly DOE Liquid Energy Inventory Report.
Technically, gold futures bulls have a strong overall technical advantage in the short term. The daily bar chart continues the six-week upward trend. The Bulls’ next upside price objective is to push the June futures closing price above solid resistance at $2,400.00. The Bears’ next near-term downside objective is to push the futures price below solid technical support at $2,300.00. Initial resistance is seen at today’s high of $2,378.10, followed by the contract high of $2,384.50. The first support is seen at this week’s low of $2,221.70, after which he is seen at $2,300.00. Wyckoff Market Rating: 8.5.
Silver bulls have a strong overall technical advantage in the short term. On the daily bar chart, the price is in its first accelerating upward trend in seven weeks. The next upside objective for silver bulls is for May futures prices to close above solid technical resistance at $30.00. The next downside objective for the bears is a close below the solid support at $26.40. The first resistance lies at this week’s high of $28.44 and then at $28.75. The next support is seen at Tuesday’s low of $27.725 and then $27.50. Wyckoff Market Rating: 8.0.
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