Gold, silver gain after hotter U.S. CPI data, weaker USDX

(Kitco News) - Gold and silver prices are higher at midday following a U.S. consumer price index report earlier this morning that was hotter than expected and further stokes worries about problematic inflation. June gold futures were last up $11.50 at $1,744.20 and May Comex silver was last up $0.543 at $25.41 an ounce.

The March consumer price index report showed a rise of 0.6% from February and up 2.6%, year-on-year. CPI was expected to come in at up 0.5% from February and up 2.5%, year-on-year. The warmer-than-expected CPI report follows last week’s producer price index report that came in much-hotter-than-expected. Both the CPI and PPI add fuel to notions that inflation is rising faster than many had reckoned.

News this morning that the U.S. Food and Drug Administration has halted the single-dose Johnson and Johnson Covid vaccine distribution due to blood-clotting occurring in a very few vaccine recipients had little impact on the markets, although the U.S. stock market did see a mild, brief sell off on the news.

Global stock markets were mostly up overnight. U.S. stock indexes are mixed at midday, on some routine chart consolidation from recent gains that put the indexes at record highs. Trader and investor attitudes remain generally upbeat, which means the stock market is viewed as the best game in town.

In overnight news, China got some more economic data that suggested the world’s second-largest economy continues to surge ahead. China’s March exports were up 30.6%, year-on-year, while its imports rose 38.1%.

The price of Bitcoin rose to a new record Tuesday, above $63,000, as it appears Wall Street is embracing the crypto currency world, after dragging its feet on the matter for years. The “Coinbase” exchange is expected to start trading on the Nasdaq this week.

The key outside markets today see the U.S. dollar index down. Nymex crude oil prices are firmer and trading around $60.30 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.68%.

Technically, June gold futures bears still have the overall near-term technical advantage but recent price action does suggest a market bottom is in place and that prices can trade at least sideways in the near term. 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 $1,749.50 and then at the April high of $1,759.40. First support is seen at today’s low of $1,723.20 and then at last week’s low of $1,721.60. Wyckoff's Market Rating: 3.5.

May silver futures bears still have the overall near-term technical advantage. Prices are still in a 10-week-old downtrend on the daily bar chart, but now just barely. Silver bulls' next upside price objective is closing prices above solid technical resistance at $26.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $23.74. First resistance is seen at last week’s high of $25.675 and then at $26.00. Next support is seen at $25.00 and then at today’s low of $24.68. Wyckoff's Market Rating: 3.5.

By Jim Wyckoff

For Kitco News

 jwyckoff@kitco.com

www.kitco.com