Gold price sells off after another hotter U.S. inflation report

(Kitco News) – Gold and silver prices are lower in early U.S. trading Wednesday and sold off following another U.S. inflation report that came in higher than expected. June gold was last down $14.50 at $2,347.00. May silver was last down $0.049 at $27.93. 

(Hey, thousands of my valued readers have signed up for my FREE weekly newsletter, “Front Burner,” and really enjoy and benefit from it. It’s my best work, I think. This week, I provide you with my take on the next serious price moves likely coming in gold and silver, including some important Fibonacci price levels that may come into play. Email me at jwyckoff@kitco.com and I’ll sign you up and send you this week’s report.) 

The just-released U.S. consumer price index for March came in at up 3.5% and up 3.8% for the core rate, year-on-year. The March CPI was seen by the marketplace as coming in at up 3.4%, year-on-year. The core CPI, excluding food and energy, was seen at up 3.7% annually. Today’s CPI data favors the U.S. monetary policy hawks. “This is really going to call into question whether the Fed can cut rates in June,” said a Bloomberg Radio host. 

This afternoon comes the minutes of the last FOMC meeting. Thursday comes the U.S. March producer price index and the European Central Bank monetary policy meeting. 

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins, and sold off after the hotter CPI print. 

Reads a Dow Jones Newswires headline overnight: “Commodities rally reflects a better economy, but also poses inflation risks.” 

The key outside markets today see the U.S. dollar index higher and rallying after the CPI report. Nymex crude oil prices are slightly up and trading around $85.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.5% and on the rise today. 

Other U.S. economic data due for release Wednesday includes the MBA mortgage applications survey, real earnings, monthly wholesale trade, the monthly Treasury budget statement and the weekly DOE liquid energy stocks report. 

Technically, the gold futures bulls have the strong overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. 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 today’s high of $2,378.10 and then at the contract high of $2,384.50. First support is seen at this week’s low of $2,221.70 and then at $2,300.00. Wyckoff’s Market Rating: 8.5.

The silver bulls have the strong overall near-term technical advantage. Prices are in an accelerating seven-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing May futures prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $26.40. First resistance is seen at this week’s high of $28.44 and then at $28.75. Next support is seen at Tuesday’s low of $27.725 and then at $27.50. Wyckoff’s Market Rating: 8.0. 

(Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Email me at jim@jimwyckoff.com and I’ll add your email address to my Front Burner list.)