Gold sees price gains after as-expected U.S. inflation data

(Kitco News, Fri. May 31st, 2024) – Gold and silver prices are modestly higher in early U.S. trading Friday, in a relief rally following a key U.S. inflation report that came in very close to market expectations and is not considered hot. August gold was last up $7.20 at $2,373.80. July silver was last up $0.116 at $31.645.

The U.S. data point of the day, if not the holiday-shortened week, saw Friday morning’s personal income and outlays report for April, including its inflation indexes that are very closely watched by the Federal Reserve, come in close to market expectations on the inflation data. The PCE price index for April was up 2.7%, year-on-year, which is right in line with market expectations. The PCE price index for March was also up 2.7%. The April core PCE price index came in up 2.8%, year-on-year and was forecast at up 2.7% and compares to a rise of 2.8% rise in the March report.

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.

In overnight news, some downbeat China manufacturing purchasing managers index (PMI) data was released. China’s official manufacturing PMI fell to 49.5 in May. A reading below 50.0 suggests contraction in the sector. The services PMI came in at 51.1 in May. The composite PMI fell to 51.0 in May from 51.7 in April.

The Eurozone May consumer price index came in at up 2.6%, which was slightly higher than expected and compares with the April reading of up 2.4%. The core CPI in May was up 2.9%, year-on-year.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are near steady and trading around $78.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.508%.

Other U.S. economic data due for release Friday includes the Chicago ISM business survey.

Technically, August gold bulls have the overall near-term technical advantage but have faded. A bearish double-top reversal pattern has formed on the daily bar chart to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,477.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the May low of $2,308.70. First resistance is seen at this week’s high of $2,388.00 and then at $2,400.00. First support is seen at $2,350.00 and then at this week’s low of $2,343.30. Wyckoff’s Market Rating: 6.0.

July silver futures bulls have the solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the May high of $32.75. The next downside price objective for the bears is closing prices below solid support at $29.00. First resistance is seen at $32.00 and then at $32.28. Next support is seen at the overnight low of $30.94 and then at $30.50.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com