Gold Price Weaker as U.S. Producer Price Index Also Runs Hotter

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May 13, 2021 11:23 NY TimeKitco 10AM Silver Fix

Kitco News, Thursday. May 13th, 2021)– Gold and silver prices are modestly lower in early morning U.S. trading Wednesday, but are well off their daily lows, following another higher-than-expected U.S. inflation reading. The U.S. dollar index has also dropped to lower price levels on the day after being firmer overnight, and that’s friendly for the metals markets. June gold futures were last down $3.00 at $1,819.70 and July Comex silver was last down $0.204 at $27.04 an ounce. 

The just-released producer price index for April came in at up 0.6% from March, which was double the 0.3% rise that was forecast. The April CPI was up over 6%, year-on-year. The PPI report follows a hot consumer price index report issued on Wednesday. Evidence continues to build that the U.S. economy and even other major global economies are going to have to battle unwanted inflationary pressures at some point down the road.

Global stock markets were solidly lower overnight. U.S. stock indexes are pointed toward firmer openings when the New York day session begins after big losses Wednesday. The equities bulls are on the ropes late this week following this week’s strong selling pressure that has negated near-term price uptrends on the daily bar charts for the U.S. stock indexes, which is a technical clue the indexes have put in price tops. Traders and investors are pondering the old trading adage, “Sell in May and go away.” 

In overnight news, Bitcoin prices plunged after Elon Musk said his company, Tesla, now will not accept crypto-currency for purchases because of their mining’s effect on climate. Dogecoin has also retreated from an all-time high after Musk appeared on “Saturday Night Live” and agreed that crypto was a “hustle.” 

The marketplace is still keeping an eye on the flare-up in the Middle East, as Israel and Hamas have ratcheted up their missile strikes against each other. The military action between the two is the most intense since 2014.

The key outside markets today see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are lower and trading around $64.75 a barrel. The U.S. Colonial pipeline system that had been shut down due to a cyberattack is reopening. The yield on the benchmark 10-year U.S. Treasury note is on the rise late this week and is presently fetching around 1.68%. 

Technically, June gold futures bulls have the overall near-term technical advantage amid a six-week-old price uptrend in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the May high of $1,846.30. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at $1,825.00 and then at $1,835.00. First support is seen at the overnight low of $1,808.40 and then at $1,800.00.

The silver bulls have the overall near-term technical advantage amid a six-week-old price uptrend in place on the daily bar chart. Silver bulls’ next upside price objective is closing July futures prices above solid technical resistance at $29.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at the overnight high of $27.33 and then at $27.50. Next support is seen at the overnight low of $26.78 and then at $26.50

Posted by :

Jack Dempsey, President

401 Gold Consultants.com