Gold and silver prices surged significantly during midday U.S. trading on Wednesday, buoyed by a U.S. inflation report that showed slightly milder-than-expected figures. Additionally, a decline in the U.S. dollar index and in U.S. Treasury yields further bolstered the bullish sentiment in the precious metals market. June gold reached a three-week peak, rising by $30.20 to $2,390.10, while July silver climbed by $0.998 to $29.70, marking a four-week high.
The morning’s U.S. consumer price index (CPI) report for April revealed a 0.3% increase, slightly below the consensus forecast of 0.4%. This contrasts with March’s 0.4% rise. The annual CPI reading for April stood at 3.4%, slightly lower than the forecasted 3.6% and down from March’s 3.8%. Traders and investors had anticipated a potentially higher CPI report, especially after Tuesday’s producer price index report for April indicated elevated inflation levels. The current CPI report aligns with the stance of monetary policy doves, advocating for earlier interest rate cuts by the Federal Reserve, a scenario that favors precious metals due to increased consumer and commercial demand.
Overnight, Asian and European stock indexes displayed mixed performances, while U.S. stock indexes showed robust gains by midday. Meanwhile, Comex copper futures soared to a new all-time high of $5.1280 per pound, propelled by factors such as constrained global supplies, improved world economic growth, smelter disruptions in China, and rampant market speculation. Some analysts draw parallels between the surge in copper prices and the remarkable rally witnessed in cocoa futures last year, hinting at the potential for substantial gains in copper prices akin to the cocoa market’s explosive growth.
In the broader market context, the U.S. dollar index exhibited a notable decline, while Nymex crude oil prices remained relatively stable around $78.00 per barrel. Furthermore, the yield on the benchmark 10-year U.S. Treasury note retreated to approximately 4.3% following the CPI report, reflecting market reactions to the inflation data.
June gold futures reached a peak not seen in three weeks today, indicating a strong technical position favoring the bulls. The next target for the bulls is to achieve a close above the formidable resistance level at the all-time high of $2,448.80. Conversely, the bears’ immediate objective is to drive futures prices below the robust technical support level at $2,300.00 in the near term. Initial resistance levels are identified at $2,400.00 and subsequently at $2,415.00, while initial support levels are observed at $2,365.00 and then at $2,350.00. Wyckoff’s Market Rating stands at 7.4, reflecting the prevailing market sentiment.
July silver futures reached a peak unseen in four months today, indicating a strong technical position favoring the silver bulls. The next target for the bulls is to achieve closing prices surpassing the sturdy technical resistance level at the contract high of $30.19. Conversely, the bears’ next objective is to drive closing prices below the robust support level at $28.00. Initial resistance levels are identified at $30.00 and subsequently at $30.19, while initial support levels are observed at $29.00 and then at today’s low of $28.675. Wyckoff’s Market Rating stands at 8.0, reflecting a bullish market sentiment.
July N.Y. copper concluded the session up 215 points at 491.65 cents today, closing nearer to the session low after hitting a record high of 512.80 cents earlier in the day. The copper bulls maintain a strong overall near-term technical advantage, with prices following a three-month uptrend on the daily bar chart. The next objective for the copper bulls is to push and achieve closing prices above the formidable technical resistance level at today’s high of 512.80 cents. Conversely, the bears’ next goal is to drive closing prices below the solid technical support at 460.00 cents. Initial resistance levels are observed at 500.00 cents and then at 512.80 cents, while initial support levels are identified at today’s low of 481.40 cents and then at 475.00 cents. Wyckoff’s Market Rating stands at 9.0, indicating a highly bullish market sentiment.
