Gold, silver slightly down as next U.S. inflation data point awaited
Gold and silver prices are modestly down near midday Wednesday. A firmer U.S. dollar index today is a negative “outside market” force working against the precious metals market bulls. Also, the near-term technical postures for gold and silver are still leaning bearish, which is inviting some of the chart-based traders to the sell sides. April gold was last down $3.10 at $2,041.00. March silver was last down $0.182 at $22.35.
U.S. stock index futures are weaker near midday. Bitcoin prices have soared this week and are presently trading above $61,000. Barron’s today reported bitcoin’s rise is due to better risk appetite in the marketplace, the big rally in the technology heavy Nasdaq stock index, and notions the Federal Reserve will lower U.S. interest rates later this year.
Today’s revision of fourth-quarter 2023 U.S. gross domestic product readings showed GDP up 3.2%, year-on-year, versus the initial reading of up 3.3%. The 4Q personal consumption expenditures) PCE price index was up 1.8%, year-on-year, versus up 1.7% in the advance report. The core PCE price index was up 2.1% in 4Q, compared to the advance reading of up 2.0%. Today’s GDP data was not a big markets-mover, as the numbers did not stray far from market expectations.
The bigger U.S. data point of the week is likely going to be Thursday morning’s personal income and outlays report for January, which also includes the PCE inflation indexes. The PCE price index in January is seen up 2.6%, year-on-year, while the core PCE price index is seen up 2.9% in the same period. Those forecasts are just slightly higher than the readings seen in the December report. It’s been said the Federal Reserve officials pay extra close attention to the inflation data in the personal income and outlays report.
Recent U.S. inflation numbers have come in a bit warmer than expected. Not hot, but still warm enough to likely have swayed the Federal Reserve into reckoning it will wait until the second half of 2024 to consider lowering interest rates.
The market to watch Thursday morning following the personal income and outlays report will be the U.S. Treasury futures markets. Immediately after the data is released at 8:30 a.m. EST, the Treasury bond and note futures markets’ price action will indicate what the marketplace thinks about the latest U.S. inflation data. Remember that Treasury futures prices move in the opposite direction of the more closely followed yields. U.S. T-Bond and T-Note prices have been trending down the past four weeks. That suggests Treasury traders suspect U.S. inflation data will continue to come in too warm to allow the Federal Reserve to lower interest rates this spring. So watch the U.S. Treasury bond and note futures markets
Wednesday morning. You can bet other market traders will have one eye on the bond markets right after the report. Remember the old market adage: “Bond traders are the smartest guys in the room.”
The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are near steady and trading around $79.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.28%.
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Technically, April gold futures bears have the slight overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at last week’s high of $2,053.20 and then at $2,061.00. First support is seen at today’s low of $2,033.40 and then at $2,025.00. Wyckoff's Market Rating: 4.5.
March silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the February high of $23.56. The next downside price objective for the bears is closing prices below solid support at the February low of $21.975. First resistance is seen at Tuesday’s high of $22.71 and then at $23.00. Next support is seen at today’s low of $22.245 and then at $22.00. Wyckoff's Market Rating: 3.0.
March N.Y. copper closed down 155 points at 381.25 cents today. Prices closed nearer the session low today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 394.70 cents. The next downside price objective for the bears is closing prices below solid technical support at the February low of 365.50 cents. First resistance is seen at this week’s high of 387.15 cents and then at last week’s high of 390.85 cents. First support is seen at 380.00 cents and then at 375.00 cents. Wyckoff's Market Rating: 5.0.
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Jim Wyckoff
David – http://markethive.com/david-ogden