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(Kitco News) – Gold and silver prices are higher in midday U.S. trading Wednesday. Gold hit an 11-month low early on today, following a U.S. inflation report that ran the hottest in 41 years, suggesting the Federal Reserve will keep its aggressive stance on tightening U.S. monetary policy. However, the gold and silver prices reversed course later in the morning when futures market bears decided to take some profits and did some short covering. August gold futures were last up $12.20 at $1,737.00. September Comex silver futures were last up $0.232 at $19.20 an ounce.
The U.S. data point of the week, if not the month, saw Wednesday morning’s consumer price index report for June come in very hot at up 9.1%, year-on-year. Expectations were for a rise of 8.5%, year-on-year. In the May report, CPI was up 8.6% annually. The markets’ early reactions to the CPI report are suggesting there is a 75% chance the Fed will have to do another 0.75% rate hike at its next FOMC meeting on July 26-27. There is a 30% chance the Fed will do a full 1.0% rate hike at the meeting. Meantime, Canada’s central bank surprised the marketplace today with a full 1.0% rise in its main overnight interest rate.
Global stock markets were mixed overnight. U.S. stock indexes are lower at midday, and lost overnight gains after the hot CPI report.
Traders were still buzzing about Tuesday’s big downdraft in crude oil futures prices, with Nymex futures falling to a 2.5-month low of $93.67 overnight. Crude’s plunge pulled other major commodity market prices down, too. The weakening raw commodity sector is an early clue that inflationary pressures may have peaked.
The key outside markets today see Nymex crude oil prices lower and trading around $95.50 a barrel. The U.S. dollar index is weaker and hit a 20-year high early on, following the hot CPI report. The yield on the 10-year U.S. Treasury note is fetching 2.943%.
Technically, August gold futures prices hit an 11-month low early on today and the reversed course to score a bullish “outside day” up on the daily bar chart. Bears still have the solid overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,800.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,700.00. First resistance is seen at today’s high of $1,744.30 and then at $1,750.00. First support is seen at $1,721.60 and then at today’s low of $1,704.50. Wyckoff’s Market Rating: 1.5
September silver futures prices hit a two-year low Tuesday. The silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $20.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at $19.50 and then at $19.85. Next support is seen at $19.00 and then at this week’s low of $18.63. Wyckoff’s Market Rating: 1.5.
September N.Y. copper closed up 330 points at 332.05 cents today. Prices closed near the session high and hit a 1.5-year low today. The copper bears have the solid overall near-term technical advantage. A steep five-week-old price downtrend is in place on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at 385.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 320.00 cents. First resistance is seen at Tuesday’s high of 345.70 cents and then at this week’s high of 352.05 cents. First support is seen at today’s low of 321.65 cents and then at 315.00 cents. Wyckoff’s Market Rating: 1.0.
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