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US Inflation Economic Data Pushes Gold Price Gains Higher

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EDITOR NOTE: Gold and silver prices are higher following a U.S. inflation report. The economic data wasn’t as good as many expected, and that led to a sell-off in the U.S. dollar index and the spike in gold and silver. Precious metals expert Jim Wykoff reports that the big driver of the gold and silver uptick and the dollar downturn was when “the U.S. consumer price index report for August came in a up 0.3% from July versus the forecast up 0.4% and after a rise of 0.5% in July. Year-on-year the CPI was up 5.3% compared to forecasts of up 5.4%.” These reports have pushed the Wyckoff's Market Rating for gold to 5.5, which tips it into the bullish side of the rating. 

(Kitco News) - Gold and silver prices are higher and trading near their daily highs in early U.S. trading Tuesday, following a U.S. inflation report that came in cooler than expected and in turn sparked a sell off in the U.S. dollar index. Gold prices had slipped to a three-week low overnight. October gold futures were last up $4.40 at $1,796.70. December Comex silver was last up $0.044 at $23.845 an ounce.

The U.S. consumer price index report for August came in a up 0.3% from July versus the forecast up 0.4% and after a rise of 0.5% in July. Year-on-year the CPI was up 5.3% compared to forecasts of up 5.4%. The report falls into the camp of the U.S. monetary policy doves who want the Federal Reserve to hold off on tightening monetary policy, and that’s what put some downside price pressure on the U.S. dollar index.

Global stock markets were mixed in quieter overnight trading. The U.S. stock indexes are pointed to modestly higher openings when the New York day session begins.

The other key outside market today sees Nymex crude oil futures prices higher, hitting a five-week high, and trading around $71.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.341%.  

Other U.S. economic data due for release Tuesday includes the weekly chain store and Johnson Redbook retail sales reports, and the NFIB small business index.

Technically, October gold futures bulls still have the slight overall near-term technical advantage but are fading and need to show fresh power soon to keep their edge. A four-week-old uptrend on the daily bar chart has stalled out. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,836.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at $1,800.00 and then at $1,810.00. First support is seen at the overnight low of $1,778.60 and then at $1,772.00. Wyckoff's Market Rating: 5.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $22.35. First resistance is seen at this week’s high of $23.89 and then at $24.00. Next support is seen at Monday’s low of $23.36 and then at $23.00. Wyckoff's Market Rating: 4.0.

Original post from Kitco News

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