(Kitco News) – Gold and silver prices are modestly up in early U.S. trading Tuesday following a U.S. inflation report that saw hot headline numbers, but the internals and revisions to the report were cooler. June gold was last up $7.70 at $2,351.10. July silver was last up $0.167 at $28.61.
The just-released producer price index for April came in hot, at up 0.5%, month-on-month, versus expectations for up 0.3%. The “core” PPI rate (excluding food and energy) was also up 0.5% in April versus expectations for up only 0.2%. However, the March PPI number was revised to down to minus 0.1% from the originally reported up 0.2%. The April PPI report would have fallen squarely into the camp of the U.S. monetary policy hawks, who want to see the Federal Reserve hold off on any interest rate cuts. However, the big downward revision to the March PPI apparently mitigated the larger-than-expected jump in the April PPI.
The consumer price index comes on Wednesday. CPI is seen up 0.4%, compared to the March report showing a rise of 0.4%. The annual CPI April reading is seen up 3.6% compared to up 3.8% in the March report.
Asian and European stock indexes were mixed to weaker overnight. U.S. stock indexes are pointed to toward weaker openings when the New York day session begins, following the warmer PPI report.
In overnight news, Japanese bond yields are nearing the 1% mark amid the Bank of Japan’s effective slight tightening of its monetary policy. Japan’s government bond yields have not been above 1% for 12 years.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are weaker and trading around $78.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.51% and up from just before the PPI report was released.
Other U.S. economic data due for release Tuesday includes the weekly Johnson Redbook retail sales report, and the NFIB small business index.
Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at $2,400.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at this week’s high of $2,370.80 and then at last week’s high of $2,385.30. First support is seen at this week’s low of $2,337.60 and then at $2,330.00. Wyckoff’s Market Rating: 7.0
The silver bulls have the firm overall near-term technical advantage and have gained good power this week. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $27.00. First resistance is seen at the overnight high of $28.73 and then at $29.00. Next support is seen at this week’s low of $28.185 and then at $28.00. Wyckoff’s Market Rating: 7.0
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